IN A PRIVATE MEETING, Volkswagen CEO Thomas Schaefer warned more than 2,000 top executives that the “roof is on fire” as a response to a dip in sales and a significant investment in electric cars. Schaefer responded by saying that the “roof is on fire.” According to Wards Auto, Schaefer discussed Volkswagen’s issues in a discussion that lasted an hour and focused on the upcoming weeks and months. He advised the executives to secure “small wins” and informed them of a strategy to reduce expenditures at the massive automobile manufacturer significantly. He immediately called for a freeze on all spending because he believed that spending had increased too rapidly in too many different areas. As part of Schaefer’s strategy to slash expenses, which has been discussed at the board level, the business will begin a “performance program” to save $11.2 billion in costs over the next three years. He thinks the company must be better equipped to adapt to the rapidly shifting market conditions to succeed. Volkswagen has already suffered losses due to this market, particularly in China, the company’s most important market. Customers were scared off by VW’s early struggles with its electric vehicles. Therefore the company sold fewer of them. Because of this, it was difficult for Volkswagen to electrify its lineup while maintaining its internal combustion engine business. Since the diesel emissions catastrophe in 2015, the company has been making changes to its products while simultaneously lowering the prices of those products. The poor entertainment system will be improved in the next ID.7 model, and touch-capacitive switches will be installed in place of buttons. During the discussion, Schaefer said, “Our structures and processes are still too complex, slow, and rigid.” Patrick Andreas Mayer, Volkswagen’s CFO, offered a more pessimistic assessment of the firm’s predicament not long after Schaefer had finished his remarks. Mayer said, “Our company is not doing well.” He said it was the “last call” for Volkswagen, referring to Schaefer’s address and the call for financial control.
