VW Group's troubled Cariad software division to lay off 2,000 workers

VW Group's troubled Cariad software division to lay off 2,000 workers

As much as massive software stacks have proved what they can do for the transportation industry, we don’t know of a carmaker doing business in the U.S. that has escaped the the pain of public software glitches. Lucid had to issue three good old-fashioned recalls in one day in August, two of which dealt with software problems. GM sent an over-the-air update during the summer to cars on the new Global B electrical architecture, an update that ended up draining the 12-volt batteries in roughly 4,000 vehicles. Tesla had to face a $2-million court case of he-said-she-said when an OTA update reduced driving range in Tesla vehicles by roughly 20%. Even with all that, we don’t know any automaker in the world that’s had as many problems with software, for as long, as the Volkswagen Group. Via TechCrunch, Germany’s Manager Magazin reports the conglomerate’s board has just approved laying off 2,000 employees in the Cariad software unit as part of the latest restructuring intended to right the digital ship.

Former group CEO Herbert Diess established Car.Software Organization in 2020, eventually renaming it Cariad and giving the task of creating “a uniform software and technology platform for all Volkswagen Group brands.” VW’s info page on the division says the unit employs roughly 6,000 people around the world, up from roughly 4,500 at the end of 2021. Despite that same page claiming Cariad is building “the leading tech stack for the automotive industry,” the failed stacks brought down the division’s first CEO in less than a year, then brought down VW Group CEO Diess two years later as problems continued. It then probably played a role in bringing down Audi brand CEO Markus Duesmann and much, if not all, of Audi’s Project Trinity when Oliver Blume took over as CEO of the VW Group. It finally took out Cariad’s second CEO, Dirk Hilgenberg, over the summer. And aside from the career killing, Cariad’s woes have proved problematic for every battery-electric car VW Group launch since the ID.3. 

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Blume put ex-Bentley production manager Peter Bosch in charge in May. Since then, Bosch has been at work on a reorganization plan to get the software division running as it should so that the software runs as it should, and so that vital products like the Audi Q6 E-Tron and Porsche Macan EV can get out the door as envisioned. Manager Magazin reported that Bosch’s plan involves laying off those 2,000 employees over the next 15 months, a step that would rewind back to 2021 staffing levels, but that action needs to be discussed with VW’s Works Council as it concerns labor issues.  

While all that’s getting sorted, sources told Manager Magazin the Q6 E-Tron and the Macan are being delayed by another 16 to 18 weeks. If that ends up being the timetable, those products will have endured more than two years of delays in total. In 2019, a Porsche exec told Autocar the Macan EV would arrive in dealerships in 2021, the ICE-powered Macan hanging around until 2023 before retiring. Come 2021, the Q6 E-Tron and Macan EV were due to be unveiled in 2022. By the end of 2022, that was 2024. Now it’s going to be later in 2024, perhaps March, and Autoblog has been told that whenever 2024 Macan EV arrives, it will be sold indefinitely alongside the current-generation ICE version as long as the market demands it.

As it awaits its v1.2 VW Group software, Porsche said it’s going to move ahead with Google Built-In as an interim solution. More worryingly, Cariad’s timetable was meant to have v2.0 out by 2025, when products like the electric Cayman and Boxster are expected, but v2.0 has been buried in favor of a redesign from scratch. 

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