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VW's Winterkorn tells 20,000 staffers of big cost-cutting plans

During a gathering of 20,000 Volkswagen Group employees at company headquarters in Wolfsburg, Germany on Wednesday, CEO Martin Winterkorn dropped a bombshell. The boss stated that the automaker isn't operating efficiently enough and admitted the company needs to radically start cutting back to raise its profit margins. To right the ship, Winterkorn has proposed killing off less profitable models and spending less on research and development.
According to Reuters, Winterkorn wants to raise the VW brand's profit margin from about 2.9 percent in 2013 to a target of 6 percent. To make that possible, his plan amounts to increasing cost cutting until Volkswagen reaches about 5 billion euros ($6.7 billion) per year to get things back in order. "Over the short-term, we urgently need more efficiency and higher profit," the CEO said during his speech, according to Reuters.
However, Winterkorn can't make these decisions unilaterally. Volkswagen's works council also has a seat on the supervisory board to represent laborers, and it isn't likely to take the proposed cuts sitting down.

VW fix would have cost $335 per vehicle

Since the Volkswagen diesel kerfuffle began, Bosch, the world's largest auto supplier, has been hooked up to a bullhorn trying to make sure everyone knows its side of the story. Bosch supplied VW with the engine management testing software, including delivery and metering modules, that VW then used to skirt emissions laws in the US. Bosch told VW in 2007 that it was illegal to use the software in cars it planned to sell yet VW did it anyway, according to reports coming out in German newspapers Bild am Sonntag and Frankfurter Allgemeine Zeitung. That first warning came two years after VW started developing the small-displacement diesel, around the time that the two men pushing its development, then-brand chief Wolfgang Bernhard and engineer Rudolf Krebs, were telling their superiors that the engine needed AdBlue urea injection to pass US emissions. VW cost controllers wouldn't approve the AdBlue solution because it would add 300 euros ($335 US) to the cost of the vehicle. Bernhard and Krebs left the same year that Bosch advised VW about the software, two years before the engine went into production. That's when things get cloudy. A report in Automotive News says that when Martin Winterkorn took over in 2007 as head of the VW Group and brand, he asked Ulrich Hackenberg and Wolfgang Hatz to keep working on the engine, and "[the] engine then ended up in VW Group diesels" with that problematic software still intact. No one has yet pointed any fingers at this latter chain of command, but like a game of Clue, right now they're the professors in the library holding the candlesticks. Warnings didn't only come from the supplier: Frankfurter says VW's initial investigation has found that an engineer issued the same caution to the company in 2011. Neither Bosch nor VW would comment on the reports.

Recharge Wrap-up: VW exec predicts EVs with 375-mile range

Volkswagen says EV ranges over 300 miles aren't too far in the future. Plug-in hybrids are merely a bridge to all-electric mobility becoming more practical for people who need to travel longer distances, according to Dr. Heinz-Jakob Neusser, Volkswagen's head of powertrain development. Energy density is increasing rapidly in new batteries. Speaking about the e-Golf, Neusser says, "I expect the next generation in 2015-17 will increase to around 300 km [186 miles] and the following step will be around 500-600 km [310-372 miles]." Neusser also says he believes that charging infrastructure will improve to catch up with these more advanced batteries. Read more at Motoring. BMW is offering higher incentives for the all-electric i3 than the range-extended version. More buyers are opting for the i3 REx, with its 78 extra miles of range. So, to move the standard i3 (which is already cheaper), BMW is offering $2,000 in incentives for October - double what is offered for the i3 REx. The added incentives help close the price gap between the BMW and other EVs with similar ranges. The deals won't last long, though. According to New Jersey BMW salesman Manny Antunes, BMW's current incentives are "as aggressive as they're going to get" for a while. Read more at Green Car Reports. Honda is changing its research and development process for all cars after a series of Fit Hybrid recalls. The hybrid version, which makes up more than half of all Fit sales in Japan, was the subject of four recalls within nine months. In response, Honda will change the way it develops cars worldwide, with one extra "gate" to pass in the process. Honda will do prototype testing earlier in the research process to see how separately developed components work together before moving onto the car's development phase. It will add time and cost to making cars, but Honda hopes it will help prevent problems - like those that come with a flurry of recalls - down the road. Read more at Automotive News. Featured Gallery 2015 Honda Fit Hybrid View 16 Photos Related Gallery 2014 Volkswagen e-Golf: Frankfurt 2013 View 15 Photos Related Gallery 2014 BMW i3: First Drive View 33 Photos News Source: Motoring, Green Car Reports, Automotive NewsImage Credit: Honda Green Plants/Manufacturing BMW Honda Volkswagen Electric Hybrid recharge wrapup