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June 27, 2017

Volkswagen wants younger and leaner management

The Volkswagen brand says it is continuing to boost productivity and on the path to a younger and leaner management tier as part of a move to a more performance orientated corporate culture.

By David Leggett

The Volkswagen brand says it is continuing to boost productivity and on the path to a younger and leaner management tier as part of a move to a more performance orientated corporate culture.

The company says that progress towards 2017 productivity targets is proceeding to schedule.

The partial early retirement scheme for employees born between 1955 and 1960 will have a significant effect, it say, pointing out that it also applies to management.

"We are expecting our management levels to become younger and slimmer," said the CEO of the Volkswagen brand, Dr. Herbert Diess.

"Volkswagen must complete comprehensive preparations for the challenges and the competitive environment faced by the industry. For this purpose, it will be necessary to increase productivity, with improved work procedures and high-performance, slim, flexible structures in all areas of the company and at all levels. This also applies to the management of our brand," says Diess. "In this context, we will achieve higher productivity with leaner structures, flatter hierarchies and an offensive entrepreneurial approach."

With the partial early retirement scheme for management members, Volkswagen has therefore set itself a number of targets. Numbers are to be reduced in line with the reduction in the overall workforce. In addition, in connection with the partial early retirement of managers, the company will review the possibility of eliminating or combining management roles, dividing responsibilities more effectively and rapidly eliminating superfluous elements from the hierarchical structure.

Diess added: "We are becoming slimmer, leaner and younger. This will make Volkswagen faster and more efficient at the same time as providing new motivation for junior managers."

In a statement, VW said it is striving to "establish a corporate culture with greater success and performance orientation in management". In future, waiting for superiors to set targets will definitely be a thing of the past. "Management means shaping, not simply administering," says Diess.

In the medium-term, the selection of junior managers will also "play its part in the reorientation of management at the Volkswagen brand". VW said the main emphasis will be on practical experience with demonstrable success in everyday work. Assessment centres, which 'only allow a snap assessment of management performance', are to be abolished. Instead, junior managers will 'prove themselves during an introductory year with a specific management task before they are finally appointed to a management position'.

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