A Big Blow For Europe'S Biggest Car Manufacturer

Piech has said he would put his hand in the fire for Lopez. Liesen has been almost as extravagant. Both will now regret their words. Lopez's departure is also untimely in business terms. Since joining VW in 1993, he has been instrumental in cutting costs and raising productivity at what was one of Europe's least efficient car manufacturers. The fact that many of VW's operations are still in the lower league in terms of productivity (although rising) shows much is still to be done.

Lopez's first priority, and the main reason why he was hired by Piech, has been to cut costs, which chiefly means negotiating discounts from suppliers. Lopez honed his skills in his long career at GM, first in Spain, then at Opel and finally as head of worldwide purchasing in Detroit.

 

At VW, cost-cutting has taken various forms. Lopez cracked the whip over suppliers to secure discounts. Among GM's allegations is that he took confidential material relating to supplier prices when he moved to VW. Lopez also helped to lower VW's costs by shifting business from the company's high-cost, German suppliers to cheaper sources.

Elsewhere, Lopez solicited new business through tireless travelling to find new suppliers. A meeting in Budapest last summer elicited responses from 128 Hungarian companies which wanted to sell to VW. His departure is bad news from an operating point of view for VW,'' said John Lawson, motor industry analyst at Salomon Brothers in London.