Volkswagen reports reorganization plan

Volkswagen splits duties of departing executive between two others.
BERLIN (AP) -- German automaker Volkswagen AG said Friday it will cut investment in auto operations by 6 percent over the next two years and reshuffle its management board as part of an overall reorganization process meant to trim costs.
As part of the changes, Jens Neumann will leave his post as head of strategy, treasury, legal matters and organization on the board. His position will not be refilled, with chief executive Bernd Pischetsrieder taking over responsibility for the duties except for treasury, which will now be overseen by chief financial officer Dieter Poetsch.
At the same time, former DaimlerChrysler AG executive Wolfgang Bernhard, who was credited with getting Chrysler back on its feet through aggressive cost cutting, was appointed to the management board to take control of the struggling VW brand by January 2006 at the latest.
Fixed assets
Meanwhile, Volkswagen said it will spend 11.8 billion euros ($15.25 billion) on fixed assets in its automotive business between 2005 and 2006, a 6 percent decrease from the previous planning round.
It said it would spend a total of 16.3 billion euros ($21.07 billion) over the next two years in fixed assets, capitalized development costs and financial assets. The company said that figure was a reduction from previous planning but did not give a percentage decrease.
The move follows an 11 percent cut in the company's five-year investment plan last year for the 2004-2008 period.
Earnings fall
Volkswagen's earnings have fallen as it confronts stronger competition from Japanese carmakers, fierce price competition in the North American market and sluggish consumer demand at home. The company said last month that third-quarter net profit fell 65 percent from the same period a year ago to 76 million euros ($98 million).
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