“Through 2023, up to 4,000 jobs… will not be restaffed if the tasks performed become redundant as a result of digitalisation, process optimisation and organisational streamlining”, the company said, promising 2,000 new digital roles however and the creation of an online university.
VW Digitalisation Move follows €30 Diesel Scandal
The move comes amid an ongoing shakeup at VW intended to improve manufacturing efficiency and create a leaner, more agile company in the wake of its diesel crisis that Chairman of VW’s Supervisory Board Dr Herbert Diess said [pdf] last month had cost VW “€30 billion dealing with its aftermath.”
In terms of digitalisation, the company explicitly named the wider use of SAP 4/Hana; SAP’s enterprise resource planning (ERP) suite, and “cutting-edge IT solutions” in particular for “administrative applications, a highly-efficient purchasing system and new standard human resources applications.”
The announcement comes five weeks after the Germany automotive company said it was turning to Amazon for help to automate all automobile manufacturing and logistics processes, in a landmark global agreement that will ultimately integrate more than 30,000 facilities and 1,500 partners in VW’s supply chain into a “Volkswagen Industrial Cloud” underpinned by AWS.
Under the contract, AWS will help VW pull together a “company-wide” data lake built on Amazon S3; use IoT services to deliver production data; managed Machine Learning service SageMaker to deploy machine learning models that help optimise the production machinery operation, and more.
It has also teamed up with Microsoft under an agreement that will see five million new VW brand vehicles per year connected to Microsoft’s Azure cloud platform from 2020 onwards, the two said, with Volkswagon to set up a new cloud development office near Microsoft’s HQ and hire 300 engineers.
VW said it will add €60 million to its training budget as part of the plans, with €150 million to be available going forward to “safeguard training requirements” as a result of the transformation.
“Training will be tailored to vocations and departments affected by the transformation. Volkswagen is also setting up an online university and sustainably strengthening learning via online platforms”, it said.
VW made profits after tax of €12.2 billion in 2018, selling 10.8 million vehicles across its brands. As Diess put it in VW’s AGM last month: “A great deal of money is needed for the major technologies of the future. Cooperation and partnerships are the right response to that. We have teamed up with Microsoft to build the Volkswagen Automotive Cloud – the future backbone for all of Volkswagen’s digital services and mobility offerings. Together with Amazon and Siemens, we are launching the Volkswagen Industrial Cloud for controlling our plants and supply chain.”
“The long-term goal is to network our global supply chain with the more than 30,000 locations of over 1,500 suppliers. That will make us faster and more efficient. And will also help us establish a new industry standard here.”