Volkswagen CEO Schaefer to Managers: ‘The Roof Is on Fire’

Thomas Schaefer’s fiery address reveals tough times are ahead for Volkswagen as unprecedented investments in the transition to electric vehicles weigh heavily on the German brand.

Greg Kable

July 13, 2023

2 Min Read
VW id.3 screenshot (2)
Price war with China sees Volkswagen heavily discount ID.3.

Volkswagen CEO Thomas Schaefer is warning of tough times, suggesting “all is at stake” in a fiery address during an internal managers’ meeting held this week.

In the hour-long meeting, Schaefer laid out the breadth and severity of problems facing VW as it seeks to become a leading manufacturer of electric vehicles while continuing to serve global markets with traditional internal-combustion-engine models, telling more than 2,000 senior managers, “The roof is on fire.”

In an energetic appeal, the German called for an immediate freeze on spending. “We are letting the costs run too high in many areas,” he said.

Schaefer (pictured, below left) indicated the next weeks and months for VW will be “very tough” and called on its managers to make “small wins,” according to sources with information on the minutes of the meeting.

Thomas Schafer VW CEO.jpg

Thomas Schafer VW CEO_3

In a bid to streamline operations, the VW head said he planned to introduce a new series of “performance programs” with the aim of saving the company up to €10 billion ($11.2 billion) in spending over the next three years. 

The so-called “performance programs” have already been discussed at board-member level, Schaefer indicated.

The call for fiscal belt-tightening at the VW brand comes as it invests heavily in EV technology and production infrastructure while continuing development of ICE vehicles to meet increasingly stringent emission and safety regulations.

It also comes amid a downturn in sales in its largest market, China, where VW has been forced to discount many of its most profitable models to remain competitive against increasing Chinese competition, both in electric- and ICE-vehicle segments. 

In the coming months, VW will begin sales of the electric-powered ID.7 sedan in Europe. It also plans to unveil new-generation ICE Tiguan and Passat models. 

Schaefer, a former chief operating officer at VW prior to his promotion to CEO in July 2022, appealed to its managers to instigate changes aimed at making the company leaner and more agile. 

“Our structures and processes are still too complex, slow and inflexible,” he said.

In a rally to the automaker’s management team, Schaefer said the company needed “VW team spirit more than ever.”

Schaefer wasn’t the only VW-brand board member to ring the alarm bell. 

In a follow-up address during an internal meeting of senior VW managers, the automaker’s chief financial officer, Patrik Andreas Mayer, said “Our vehicle business is unwell” before describing Schaefer’s address as a “last call.”




Subscribe to a WardsAuto newsletter today!
Get the latest automotive news delivered daily or weekly. With 5 newsletters to choose from, each curated by our Editors, you can decide what matters to you most.

You May Also Like