- To: "'Alan Hoglen'" <doolbnroht@aol.com>
- From: "Hoglen, Edward L" <HogleEL@ch.etn.com>
- Date: Mon, 6 Nov 2000 12:28:18 -0500
- Return-Receipt-To: "Hoglen, Edward L" <HogleEL@ch.etn.com>
Nov 6, 2000 - 11:45 AM Volkswagen Aims to Share More Parts, Trim More Costs The Associated Press WOLFSBURG, Germany (AP) - Volkswagen AG is moving to improve profits with a cost cutting plan that could save billions of dollars, the company's chairman said in an interview published Monday. Volkswagen can save up to 1,000 marks ($460) per auto by increasing the number of major parts that are shared between models, Chairman Ferdinand Piech told the German business daily Handelsblatt. The move is a refinement of the company's current strategy of platform sharing - or building similar sized cars on the same framework. The Wolfsburg-based company uses four main platforms to build its cars. The new plan would cut costs by increasing the number of parts shared by cars produced in so-called "joint production systems." There would be 11 groups of cars sharing parts in this way, Piech said. The new system is to be fully in place by 2005, and would allow savings into billions of dollars in the course of subsequent years. Calls to Volkswagen seeking comment Monday were not immediately returned. In the interview, Piech also said Volkswagen aims to squeeze earnings more evenly out of new car sales, its vehicle service branch and its financial services division- with the goal of having each branch contribute a third of the company's profits. Currently, Volkswagen derives almost all its earnings from the sales of new cars and replacement parts. According to forecasts, Volkswagen will post record profits for 2000, about 30 percent higher than last year's earnings. Riding a booming U.S. auto market and a wave of hot-selling exports, Volkswagen posted a nearly 50 percent increase in adjusted net earnings for the first nine months of the year. The results follow DaimlerChrysler's report that third-quarter earnings fell 79 percent, Ford Motor Co.'s 7 percent decline in profits, and General Motors Corp.'s decrease of 5.5 percent because of losses in Europe. AP-ES-11-06-00 1145EST © Copyright 2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Brought to you by the Tampa Bay Online Network