Shulou(Shulou.com)11/24 Report--

Fire employees after firing CEO

Author | Truman

Volkswagen's software department is still unable to withstand the pressure.

Volkswagen plans to lay off 2000 people at its software subsidiary CARIAD, according to the German manager magazine.

This is another major change in CARIAD after the "bloodbath" of senior management five months ago, which means that the previous restructuring plan will be affected and the new software architecture will continue to be delayed.

As the "political legacy" of the previous CEO, CARIAD has been ill-fated since the current CEO Oliver Blume (Obom) came to power.

At the beginning of this year, Volkswagen said it had completed a six-week strategic review of the software division, and the final result was that there would be no layoffs and would pay more attention to efficiency.

Three months later, however, Volkswagen fired all the executives at CARIAD except CPO (head of personnel) Rainer Zugeh, even CEO.

Now that another 2000 jobs are planned, the future of CARIAD is beginning to be uncertain.

Up to 30% of layoffs Volkswagen's board of directors has approved the layoffs, which will begin in 2024 and end at the end of 2025.

Although the company has agreed, the layoff plan has to be approved by the Labor Commission, which has negotiated the employment security of workers.

A spokesman for the Volkswagen Union said that it does not accept such across-the-board layoffs. "in terms of structure and task, there is no specific information on which jobs will be cut."

A spokesman for CARIAD was even more tight-lipped about the layoffs, saying only that CARIAD CEO Peter Bosch (Peter Bosch) had been working on a "comprehensive transformation plan" to "reposition" the company since the summer. It also said that "the transformation plan has entered its final stage and will be notified after the adoption of a resolution by the relevant agencies."

This may also mean that how to move forward with layoffs has not yet been finalized, but senior management has basically decided on the measures for layoffs.

At the same time of the layoffs, the German media Automobilwoche reported that the Audi Q6 e-tron will be postponed again until next year, which is still due to software problems.

CARIAD software development has lagged far behind, causing delays in the release of major new models of major customers Macan EV, Audi (Artemis) and Bentley (Bentley) in July last year.

Earlier, the debut of the Volkswagen ID series was postponed due to software problems, and a series of problems led to serious dissatisfaction with this department within the group.

On the other hand, although CARIAD is slow to deliver, it is not hesitant to spend money. According to Volkswagen Group's 2022 results, CARIAD lost a lot of money, with only 796 million euros in revenue last year and an operating loss of 2.068 billion euros in the same period.

It continues to lose money this year, with an operating loss of 1.7 billion euros from January to September.

In 2021, when Volkswagen's last CEO Deiss was alive, CARIAD lost 1.327 billion euros, accounting for nearly 10 per cent of the group's profits. As a result, CARIAD's cumulative loss in just two years was nearly 3.4 billion euros (about 25.8 billion yuan).

Now it seems that CARIAD after nearly a year of adjustment, the progress of research and development may not be much improved, in order to increase revenue and reduce expenditure, layoffs or now have to take a step.

Currently, CARIAD has 6000 engineers and developers around the world, and 2000 people have been laid off, accounting for 30% of the company's total, which is undoubtedly a big deal in any company.

02. Internal brands all complain. In 2019, the former Volkswagen CEO Dis published an article entitled "cars will become Software products", which pointed out that Volkswagen must become a software-driven car company, not just change the transmission system.

In June of the same year, Volkswagen's independent software division, Car Software (the predecessor of CARIAD), was exposed, and three months later, Bloomberg reported that Volkswagen planned to invest $9 billion (62 billion yuan) in it.

In July 2020, under the leadership of Deiss, Volkswagen Group formally established the software company CARIAD, which is responsible for the independent development of core software systems for Volkswagen's electric vehicles and the realization of a unified automotive operating system.

After the establishment of CARIAD, it gathered almost all the software talents within the public, and was once highly expected.

CARIAD is also developing three different systems for different brands of models, mainly to integrate the electronic and software architecture of vehicles, which Volkswagen calls end-to-end electronic architecture (end-to-end electronic architecture, E ³).

E ³is not a traditional electrical and electronic architecture, but includes electronic and electrical hardware, software and upper-level applications. Adapted to E ³are Volkswagen's cloud service VW.AC and in-car operating system VW.OS, while E ³, VW.OS and VW.AC are the most important product portfolios of CARIAD, based on which in-vehicle infotainment systems, driving assistance and travel services are developed.

It is the delivery of E ³that is a drag on CARIAD's development. There are three platform architectures under E ³:

E ³1.1 (based on MEB platform), has been mass produced on Volkswagen ID.3 and ID.4, but the effect is not good.

E ³1.2, based on the PPE platform, plans to board Porsche Macan, Audi Q6 e-tron and other models from 2023, which will now be delayed by 16-18 weeks.

E ³2.0, based on the SSP platform, will achieve a truly unified architecture for all Volkswagen brands. It was originally planned to be launched on Audi Artemis as early as 2025, but it is now being redeveloped, starting with the new electric vehicle Trinity, all future models will be based on this platform.

In retrospect, there were problems with the three nodes delivered at E ³, starting with repeated delays in delivery, forcing Porsche and Audi to delay the launch of a number of important models.

As the hope of Volkswagen's electrified transformation, the ID series, which was first launched, has frequent software problems, such as car crashes, direction failure, brake abnormalities, and so on, which have been complained by many car owners that Volkswagen software technology is "like a blank piece of paper."

It is also because of the bad start of the ID series, which has led to consumers' doubts about the public's inability to do good software.

The public is clearly aware of this problem, so the top priority of the current CEO Obom is to restructure CARIAD.

Obermu proposed that we should first locate the most valuable core competitiveness on the software side, and then seek mature cooperation in the market to ensure progress and quality. The second is to revise the delivery time and sort out the process and interface of CARIAD's cooperation with various brands.

03. Why can't you make good software? There is no doubt that the current automobile market is electric and intelligent, and even gradually began to move from software-defined cars to the era of AI-defined cars.

However, Volkswagen, which has a hundred years of experience in building cars, has turned to software development, which is not allowed and embarrassing for Volkswagen.

So why can't Volkswagen do a good software system on its own?

From the perspective of the public's layout of CARIAD, it can only be said that the goal is too high, the reality can not keep up with the reality, while developing the system of three platforms, resulting in a huge investment of human, material and financial resources, the technical path is very vague.

Secondly, Volkswagen, as the representative of traditional car companies, is experiencing the labor pains from mechanical drive to software drive in the transition to new energy and intelligence, which is also a problem faced by other traditional car companies.

In the early years, the mainframe factory was only responsible for building mechanical structures such as chassis, engine and gearbox, but now it needs to do it on its own, from hardware to software, and it takes a lot of time to re-explore and develop, and the manufacturing and development cycle of cars is generally very long. the corresponding software development is also the case, but the market does not wait for people.

Even if the R & D is successful, it will take a long time to test, from individual unit testing to integration testing between different units, to audit, vehicle phase testing, and so on. If something goes wrong, we have to start all over again.

The complexity of the process and the stringent standards, especially the global car companies such as Volkswagen, have higher standards in order to meet the needs of different countries, so they spend a lot of time and capital cost in this process.

However, no matter how difficult it is, we must continue to do it, otherwise there is no place to put the face of the public for a hundred years.

This article is from the official account of Wechat: Super Electric Lab (ID:SuperEV-Lab). Author: Truman.

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