* Extra Wolfsburg shifts due partly to MQB problems - worker
* MQB proving tough to bed in for VW Golf - manager
* Q2 results set to highlight cost problems for VW brand
By Andreas Cremer
WOLFSBURG, Germany, July 29 Volkswagen's move to
add extra German production shifts for its top-selling Golf
hatchback, which the group has attributed to strong demand, is
also due to problems adjusting to its flagship new manufacturing
platform, company sources told Reuters.
Europe's biggest automaker is relying on its new MQB modular
platform to deliver big savings by using more common parts
across its burgeoning range of models, at a time when once
red-hot demand in emerging markets is cooling.
But the drive to produce a greater variety of cars is
proving tricky on some assembly lines, leading to delays and
overtime, according to a worker who helps make Golf cars at
Volkswagen's home town of Wolfsburg.
"We're coping with many self-inflicted troubles here," said
the worker, who is in his late forties and declined to be
identified. "Overtime has somewhat become the order of business
and some of it is totally unnecessary."
Volkswagen (VW) has enjoyed a period of unprecedented
growth, boosted by emerging market buyers of its upmarket Audis.
Its sales have risen more than a half to 9.7 million vehicles in
2013 compared with levels before the financial crisis, and it is
set to hit a 10-million sales target in 2014 - four years early.
But the rapid expansion has led to a costly proliferation of
models. At the group's core VW brand, for example, while output
has risen almost a third over three years, profit margins have
languished as the Golf has expanded to 14 different models.
At 2.9 percent last year, the VW brand's margin is way
behind its medium-term goal of at least 6 percent and even
further behind auto division margins of 8.8 percent at Toyota
and 9.5 percent at South Korea's Hyundai Motor Co.
The MQB platform is at the heart of the German group's drive
to build an ever wider range of cars, more rapidly and at lower
cost as it strives to overtake Toyota to become the
world's biggest carmaker by 2018.
While driving through MQB, VW Chief Executive Martin
Winterkorn has also called for "painful" cutbacks at the VW
brand - the group's biggest auto division by sales - seeking to
achieve annual savings of about 5 billion euros ($6.7 billion)
from 2017, in a move that has angered workers.
Some analysts are concerned MQB may not deliver the expected
benefits as VW strives to raise both output and margins.
"VW appears to be drifting off target, many problems have
been masked by steady volume gains," said Stefan Bratzel, head
of the Center of Automotive Management think-tank. "The pitfalls
of complexity are seemingly beginning to haunt VW."
The difficulties are likely to be highlighted in VW's
second-quarter results on Thursday, which analysts expect to
show a one-third drop in operating profit at the VW brand to 610
million euros compared with a year earlier.
VW has run 37 additional weekend-day shifts on Golf
production at Wolfsburg this year, a spokesman said, adding that
the bulk of those were to meet stronger-than-expected demand for
the Golf and Tiguan models. He declined to comment on whether
any of the extra work was also linked to assembly line problems.
However, a high-ranking manager at the VW brand told Reuters
there were some difficulties.
"We seem to be getting it right with (producing) Audi and
Skoda models (on MQB-based assembly lines)," he said on
condition of anonymity. "It's not quite clear yet why we're
having these problems" with Golf models.
Overtime has also affected VW's second Golf-making plant in
Germany at Zwickau.
The VW manager said centralised decision-making may be
leading to inefficiencies across the twelve-brand VW group,
noting that CEO Winterkorn was the point man even on secondary
projects. This structure had occasionally delayed decisions on
strategy and models, he said.
The worker on the Wolfsburg assembly line said production of
body shells was frequently disrupted by accommodating new
variants such as the electric Golf and the so-called Sportsvan,
which require different underbody fittings from the base model
but run on the same line. Body shell shortages in turn slow
paintshop and car-assembly operations, he added.
Disruption is also caused by flawed programming of robots
which need to switch rapidly between different actions amid a
variety of car bodies, a company official familiar with the
A Wolfsburg-based supplier added the VW brand also made many
components in house, such as seats and transmissions, that
rivals bought more cheaply from third parties.
"In our opinion, the issue of complexity is at the very top
of the agenda," said VW works council chief Bernd Osterloh.
"Whatever seems sensible for individual brands does not at
all have to be profitable for the entire group."
($1 = 0.7443 Euros)
(Additional reporting by Jan Schwartz; Editing by Mark Potter)