Volkswagen forges ahead

The Global Financial Crisis has been kind to Volkswagen. How else to explain the company's massive spending over the next three years?

According to a press release issued today, the manufacturer has committed to an investment of €25.8 billion over the next three years, of which €19.9 billion will be set aside for property, plant and equipment. Half of that sum will be spent in the company's domestic market, Germany, and the remaining €5.9 billion is allocated to "capitalised development costs".

From the €19.9 billion aimed at upgrading property, plant and equipment, as much as €13.3 billion will target the modernisation of infrastructure within the company's automotive division.

"The automotive industry is facing significant economic and technical challenges," said Prof. Dr. Martin Winterkorn, Chairman of Volkswagen Aktiengesellschaft's Board of Management.

"The Volkswagen Group is vigorously driving forward its long-term growth strategy by investing in environmentally friendly models, innovative technologies and new plants. We are continuing to make focused investments in our future."

A large part of the non-German investment in infrastructure will head across the Atlantic to fund the new American plant in Chattanooga, Tennessee. Volkswagen anticipates operations at this facility to commence in 2011, well within the 2010-2012 timeframe for this investment program. The figures bandied around by Volkswagen don't include a further €4.4 billion to be invested by Volkswagen and its partners in China between 2010 and 2012.

Dr. Winterkorn also announced today the appointment of two new members of the company's board of management, the retirement of one member and a couple of other changes to personnel on the board.

Dr. Arno Antlitz, an engineer with a doctorate in economics, replaces Lothar Sander on the board and assumes responsibility for Controlling and Accounting.

"Lothar Sander has achieved much for our company in over 30 years of service," said Dr. Winterkorn, in farewelling the retiree. "Volkswagen's good financial position is in no small measure due to his commitment."

Christian Klingler, an Austrian by birth, has accepted a position on the board as the member responsible for sales. Klingler is already represented on the board of the Volkswagen brand (which is not the same as the board of management for Volkswagen AG), and holds down Sales, Marketing and After Sales in that role.

Rupert Stadler hails from Bavaria in southern Germany and joins the VW AG board as the representative of Audi AG. With a background in finance, Stadler is also the current chairman of the board for Audi.

Volkswagen has also renewed the contract of Dr. Horst Neumann, head of Human Resources and Organisation on the board. Finally, the company has announced that Detlef Wittig, currently Executive Vice President, Group Sales and Marketing, has been handed the responsibility for management of international investment projects.

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