Will Volkswagen reset Cardiad?
The heavy restructuring of Cariad, the software development unit within VW that never worked as hoped, continues. Here is Blume's plan to restart it (avoiding draconian cuts)
Cars, as we know, are becoming real computers, four-wheeled extensions of cloud environments and devices that are in your pocket or on your wrist. A transformation in the ecological transition that has caught several car manufacturers unprepared, forced to make agreements with Big Tech or open ad hoc business units. The previous management of the Volkswagen group had decided to invest in this last option, opening Cariad, but the choice did not turn out to be particularly happy.
ALL THE DELAYS OF CARIAD
In fact, there are many delays on the various projects that Cariad has accumulated over time, reaching the plans of the 2.0 platform, initially scheduled for 2025, and the Trinity flagship. The first announcements of the SSP date back to 2021 (here is the news), but to see the platform intended for the future generation of models of the various brands of the Volkswagen Group, we will have to wait several years. With the risk that in the meantime technology has revolutionized batteries and platforms. The same goes for the electric variant of the Porsche Macan and its twin of the Four Rings, the Q6 e-tron.
THE MOVES TO RESTART THE MACHINE
Having ousted the past CEO, Herbert Diess , his successor, Oliver Blume , immediately took charge of the dossier, aware that Cariad was representing the canonical bottleneck for the Group's entire electricity strategy.
First by revolutionizing the top management: a super nerd like Sanjay Lal arrived from Tesla, an IT developer already at Tesla, with managerial experience also in Rivian and Google, while the role of CEO was entrusted to the former head of production of Bentley (interested from Cariad's delays), Peter Bosch , replacing Dirk Hiligenberg.
The other strategic moves seen so far concern the alliance with the Italian-French semiconductor multinational, StMicroelectronics, and above all, given the interests in China, with the Asian Horizon Robotics in an attempt to accelerate the pace of innovations and above all to have a foot in A country which now increasingly looks to its own products for electric cars: cheaper but also full of hi-tech devices, particularly appreciated by Dragon users. Volkswagen will invest around 2.4 billion euros to continue operations with Horizon Robotics and, through Cariad, becomes the majority shareholder of the joint venture, with 60% of the capital.
Also in China, Volkswagen has started a series of collaborations with local companies to draw on their platforms and accelerate the marketing of electric cars; SAIC will support Audi, so it has put 700 million euros on the table for a 4.99% stake in the manufacturer Xpeng for the joint development of Bev.
WHAT DOES THE PLAN INVOLVE TO SAVE PLACES
In short, in addition to the loss of profit due to the delays, Volkswagen has so far had to face several unexpected expenses to make amends. It is not surprising that there has been talk of a major restructuring for months, with possible layoffs aired by the German press for the software house which could affect 2,000 employees out of the current 6,500.
All press rumors just confirmed by the recent agreement with the unions to cut costs for development activities by 20% until 2028 under penalty of a trap, i.e. the start of a program of voluntary redundancies in the event that this percentage is not reached of savings.
Especially since, to remain competitive compared to Chinese brands, VW has just inaugurated a heavy season of cuts in all units. This is the infamous 10 billion euro recovery plan announced in the middle of the summer by CEO Thomas Schäfer : "We must learn to operate with fewer staff". “This – he tried to adjust the aim – does not mean that fewer people have to work harder, but rather reduce inefficiencies and avoid waste and unnecessary redundancies”.
But no one should think of underestimating the cut plan because "The situation is very critical – warned Schäfer in November – our orders, in particular with regards to electric cars, are lower than expected". The Group began to cut by not renewing the contracts of several hundred workers hired on temporary contracts. It remains to be seen whether Volkswagen will be able to restart once and for all a business unit that has never started or whether it will have to go through an abrupt reset of Cariad.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/volkswagen-resettera-cardiad/ on Fri, 22 Dec 2023 06:38:17 +0000.