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Brandstätter: Fewer Options for More Success

The new Chief Operating Officer’s (COO) plan for the future of Volkswagen.

Making the company more efficient: COO Ralf Brandstätter has been in his new post for 100 days.

The new COO role is a first in Volkswagen’s history. Why was the position created?
Since Herbert Diess is now not only the chairman of the management board at Volkswagen but also the CEO of the entire Group, it quickly became apparent that some areas might suffer due to the demands of the two roles. The COO role ensures that day-to-day operations at the Volkswagen brand run smoothly so that Mr. Diess can concentrate on strategic issues. My task as COO is to manage the company efficiently so that we achieve our goals quickly, and fully exploit the synergies and potential of the Volkswagen brand together across all divisions. Today, we are setting the course to make Volkswagen fit for the future.

But what exactly do you do as COO?
I have quite a range of responsibilities: one of the things I do is manage various committees. To be successful, we have to work together more closely across divisions so that we can find optimal solutions quickly. The key is to ensure that our core divisions work together even more closely in an integrated way. Finally, I am also required to work with the CEO to implement the strategies developed,and to do so in a way that ensures that our targets are achieved on time.

 

You’ve been at Volkswagen for a long time. You could say that you know the company inside and out.
At the very least I can say that I have gotten to know a lot of areas at Volkswagen. I started working at the Braunschweig plant in 1984 with an apprenticeship as a shop fitter. I then worked shifts on the production line assembling steering systems. After that, I went on to complete my university entrance qualification and studied Industrial Engineering and Management, specializing in Production Technology. After graduating in 1993, I joined Procurement. I took on various roles in this area and in the General Secretariat, and then I joined Seat in Spain, where I was Head of Procurement. After returning to Wolfsburg, I worked as the Divisional Director of Procurement until I was appointed Head of Procurement at Volkswagen in December 2015, and in August this year I was also made COO.

 

"To find optimal solutions quickly, we must work together more closely across divisions"

Ralf Brandstätter, Volkswagen COO

 

What is the most important decision you’ve made recently?
WLTP, the new measurement process to determine exhaust gas emissions introduced for new vehicles on September 1, 2018, continues to pose a significant challenge for us. And an additional WLTP level will be introduced in 2019 that is even more challenging. That means a lot of work for us all. Together with Model Range, Production, Technical Development, and Sales, we have decidedto reduce complexity here for 2019. We are cutting down on options with very low assembly rates. The reason is clear: we must quickly make the broad range of vehicles available in the configurator for our customers again. And that will be just those versions that are in high demand.

 

Car enthusiast through and through: at the GTI meeting, Ralf Brandstätter had the logo sprayed on his arm.

And what is the most important task in the short term?
There has been a huge shift in customer demand towards gasoline engines in the German and European markets. We have to manage production capacity in the plants so that we can deliver what our customers want quickly and to our usual quality standards.

You are keen to make the company more profitable. What exactly will that entail?
Volkswagen Passenger Cars has just published its report for the third quarter. The company has continued to make progress. After the first nine months, the figures for deliveries and turnover are above last year’s levels. With 4.6 million vehicles delivered, up 2.9 percent, this was the most successful first nine months in the company’s history. But we also know that we need to further improve our operating profit as a proportion of revenue so that we can invest more quickly and intensively in the electricification an digitalization of our model range. That will only be possible if we set a profitability target of over six percent by 2025.

And how do you plan to achieve that six percent?
There are a number of approaches. One is to reduce the number of options offered. The Golf is a good example of this. We sold almost 84,000 Golf cars in Germany in 2017. Of those, more than 58,000 had different configurations, and only 400 Golf cars were identical – not to mention the different colors. You could say that we produced unique models. And that’s exactly what we need to do better in future. That brings with it advantages for everyone. The production plants need less warehouse space, the supply chain becomes simpler to manage, and in the end the customer also benefits because it’s easier to order using the configurator. Reducing complexity is the key requirement for further improving productivity in our plants.

How can you achieve that?
We have already put together a team that is pursuing three main avenues. We are checking whether we can afford to offer options in certain markets, as well as certain engine-transmission and trim options. Secondly, we are looking at the optimal degree of parts and module complexity. We are now tackling that issue together with my management board colleagues from Development, Sales, and Production. Last but not least, we are going to further streamline administration. There are still a number of processes in the company that are much too slow and bureaucratic. The further digitalization of our systems will play a crucial role as we seek to carry out this transformation.

"You could say that we produced unique models"

Either...
or…?

Asking Ralf Brandstätter

Christmas or Easter?
Both. Spending time with family is the main thing.

VfL Wolfsburg or 
Eintracht Braunschweig?
VfL Wolfsburg.

Bach or Beatles?

I prefer NDR 2 or NDR Info.

Left or right lane? 
Moving forward efficiently is the most important thing.

Movies or TV shows?
I’d rather have a book.

The mountains or the sea?
The view of the seafrom a mountain.

Jogging or swimming?
Both. And then a bike ride! For me, endurance sports are a good way to balance work.

Chocolate or gummy bears?
No question about it: chocolate. But dark, please!