Wither VW's Crown Prince Wolfgang Bernhard

After yesterday’s shareholder meeting, my bet is that Volkswagen brand chief Wolfgang Bernhard won’t stick it out at VW. His radical drive to restructure the ailing automaker has just run into a major roadblock — namely Chief Executive Bernd Pischetsrieder. Eager to win the backing of labor representatives on the VW supervisory board to extend his contract until 2012, Pischetsrieder just agreed to soften Bernhard’s restructuring plans and “preserve jobs” in Germany. Specifically, he agreed to reverse plans to sell or close VW’s uncompetitive components plants. That’s bad news for VW’s restructuring, not to mention totally demotivating for Bernhard. VW suffers from the highest labor costs in the industry ($70/hour) and the shortest working week (28 hours/week), not to mention 40,000 excess employees. That adds up to highly unproductive factories.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.