Volkswagen Plans $1 Bln Cut In Capital Spending In 2016

(RTTNews) - German car giant Volkswagen AG (VKW.L, VLKAF.PK, VOW.BE), Friday said it would cut capital expenditures, such as investments in property, plant and equipment, investment property and intangible assets, excluding capitalized development costs, to EUR 12 billion in 2016 compared with a yearly average of EUR 13 billion in previous years.

"We are operating in uncertain and volatile times and are responding to this," Volkswagen Chief Executive Matthias Müller said after a meeting of the auto maker's supervisory board. "We will strictly prioritize all planned investments and expenditures. As announced, anything that is not absolutely necessary will be canceled or postponed."

Müller announced the intention to increase expenditure on alternative drive technologies by approximately EUR 100 million next year.

"We will review and potentially cancel further expenditures or spread them out to a greater extent in the next few weeks, but without putting our future viability at risk." Müller said. "Together with the works council representatives we will make every effort to keep our core workforce on board."

Volkswagen said construction of the planned new design center in Wolfsburg is being put on hold, saving approximately EUR 100 million and plans for a paint shop in Mexico are under review.

Separately, Volkswagen said Board member for Human Resources Horst Neumann to retire with effect from November 30, 2015. CEO Matthias Müller temporarily assumes responsibility for Human Resources.

Jörg Hofmann, First Chairman of IG Metall, and Johan Järvklo, Representative of the Swedish Metal Workers' Union at Scania, were appointed members of the Supervisory Board of Volkswagen AG by Braunschweig Local Court. The appointment of Hofmann is effective on November 20 and Järvklo appointment will be effective on November 22, 2015. The company also added that Berthold Huber and Hartmut Meine step down from the executive body.