VW Shift Consolidates Power; Brand Chief's Exit Stirs Cost-Cut Worry as CEO Gains Influence
A management shake-up at Volkswagen AG is putting more power in the hands of its engineering-minded new chief executive officer, Martin Winterkorn, and raising concerns among investors about how aggressively Europe's largest auto maker will continue to cut costs.</br></br>Europe's largest auto maker by vehicles sold said yesterday that the head of its core VW brand, Wolfgang Bernhard, would leave the company "by mutual consent" effective Jan. 31, less than two years after taking office and roughly two months after then-CEO Bernd Pischetsrieder abruptly resigned. Mr. Pischetsrieder had clashed with Volkswagen Chairman Ferdinand Piech over the company's strategy and governance.</br></br>Mr. Winterkorn, who officially became CEO of Volkswagen Jan. 1, couldn't be reached to comment and has said little publicly about his plans for leading the company. While Mr. Winterkorn has garnered praise for increasing Audi's sales in recent years, investors question whether he will bring the same energy to cost cutting as Mr. Bernhard, who had taken a prominent role in the effort.</br></br>Volkswagen said in a statement yesterday that its new management structure "opens the way for greater synergies" within the company. An aide at the company's communications department said its representatives were traveling back to Germany from the North American International Auto Show in Detroit and weren't available to comment.</br></br>Mr. Winterkorn will now lead the VW brand and oversee research and development for the company. Volkswagen also reorganized its brands, putting luxury nameplates Audi, Bentley, Bugatti and Lamborghini together in one division, and mass-market brands VW, Seat and Skoda in another.