Berlin, Germany

Volkswagen Group's SEAT and Volkswagen brands are swapping their finance heads as the struggling namesake brand is going on a cost-cutting drive. David Powels, the chief financial officer (CFO) at Spanish-based subsidiary SEAT, would swap positions with VW CFO Patrik Andreas Mayer, confirming an earlier report by Manager Magazin. This comes as Volkswagen is looking at factory closures in Germany, which has sparked an outrage from factory workers and executives alike. 

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In his new role at Volkswagen, Powels will be responsible, "under even more difficult conditions", for designing a competitive cost base. He has also been handed over the task of improving synergies between the group's core brands, VW brand CEO Thomas Schaefer said in a statement. These brands include Volkswagen Passenger Cars (VW), Skoda, SEAT/CUPRA and Volkswagen Commercial Vehicles.

Volkswagen is falling behind on a 10-billion-euro (USD 11 billion) cost-cutting drive that it had initiated in December. As per the company's management, the plan does not go far enough for it to hit its goal of a 6.5% operating margin by 2026. The brand is struggling due to a shrinking European market and rising competition from China and elsewhere.

In its cost-cutting measures, Volkswagen has raised the possibility of closing domestic plants and dissolving long-standing job guarantees at six of its facilities. This drew flak from Germany's largest union, IG Metall, which warned that the union would "leave no idea unexplored" in its efforts to counter the threat of plant closures and job losses. Among the options under consideration is the potential implementation of a four-day work week, a measure reminiscent of a similar arrangement introduced during a previous crisis in 1993.

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The gravity of the situation was further underscored during a packed staff meeting at Volkswagen's Wolfsburg headquarters on Wednesday.