Beetle, Golf, Passat – and now a discontinued model?

‘When VW coughs, Germany gets the flu’ was long regarded as a key insight in the country’s economic miracle. But now VW is not only coughing, it is sick itself. So sick, in fact, that the VW Board of Management is threatening mass redundancies and plant closures. Germany’s flagship company in a nosedive? If this happens, it will be a first in German automotive history.

Economic experts also confirm: ‘The car industry is still the most important sector in Germany. And VW is the top dog in this sector. If the giant wobbles, then everything wobbles’. Carsten Brzeski, chief economist at the major bank ING (BILD, 5 September 2024), for example.

VW Works Council Chairwoman Daniela Cavallo; VW is ‘not just about the 120,000 jobs at Volkswagen AG, it’s about Germany’.

Volkswagen had the right car for many generations: Beetle, Golf or Passat. VW cars have characterised the streets and cities of the Federal Republic for decades. But now plant closures are looming. Former CEO Herbert Dies once promised to make Volkswagen a world leader in electric cars by 2025.

Has Germany’s major corporation overslept the future of the next generation of cars, the electric car?

After all, the number of pure electric cars sold globally increased tenfold between 2010 and 2021 – but largely without the German car manufacturers and also without VW. In 2023, Tesla’s Model Y was the best-selling car in the world for the first time. And by 2024, 70 per cent of new cars in Norway will be e-cars. And in Kenya, Africa, combustion cars will no longer be allowed to be imported from summer 2024. The European Parliament has just confirmed that from 2035, combustion cars will no longer be allowed to be produced and sold throughout the EU.

However, the Bild newspaper has been campaigning for years against the end of combustion cars in 2035 and invited the head of the supervisory board of US car manufacturer Ford in Germany, Gunnar Herrmann, for an interview. But he explained to the completely surprised Bild reporter: anyone who continues to hope for combustion engines has no strategy or is ‘whistling from the last hole’ – combustion engines are economic killers. But combustion cars are ‘the centrepiece of German industry’, which is ‘going down the drain’, the Bild colleague warned the car manager. His ice-cold reply: ‘Yes, it’s going down the drain because you can’t meet the climate targets with it.’

The solution, according to the car manager, is new technologies and the retraining of employees. There is no other way. The car manager had to think about the future and his employees, otherwise the Chinese competition would overtake him and the Bild reporter would be stuck in the past.

Three years earlier, 69 German companies had already called for a faster coal phase-out and the massive expansion of wind and solar parks. The Otto Group, SAP, Allianz, Rossmann, EnBw and E.on, among others, signed the petition. Out of self-interest, they wanted clear framework conditions. And they know that Climate policy is economic policy. Life punishes those who come too late. VW employees are painfully experiencing the truth of this prediction these days. Perhaps a reduction in working hours or the four-day week are more of a lifeline for the ailing company than plant closures and mass redundancies. VW has already saved itself in the middle of a crisis with an exemplary 28-hour week. Better less work for everyone than work for fewer people with many redundancies.

Oliver Blume, the VW boss who now had to announce the planned painful mass redundancies, joined VW in 1994. And it was precisely in this year that the Group had concluded a 30-year job security pact with its employees, which Blume has now cancelled. According to this pact, there were to be no compulsory redundancies. Blume wants to save billions in this way.

It is not just the German car manufacturers that have been fixated on their old combustion models for too long; Olav Scholz’s traffic light coalition also stuck to the dogmatised debt brake for too long, just as Volkswagen stuck to the combustion car for far too long. Robert Habeck, of all people, warned VW back in 2019 as a green state politician in Schleswig-Holstein: ‘If you don’t offer an electric car for less than €20,000 by 2025, I fear you will fail on the market.’ His prediction from 2019 now seems to be coming true. At the time, he was labelled the ‘Cassandra of Lübeck’.

Hesitation, procrastination, doubt: you can’t shape the future with this triad, you can’t even successfully manage the past – the Chinese competition never sleeps. Germany’s current car policy is turning a successful model into an obsolete one.

We also need a vision of electric mobility in this country. Because the future is electric. The Chinese car industry is already offering electric cars for 12,000 euros. These are the people’s cars of tomorrow.

Source

Franz Alt 2024 | Translated with www.DeepL.com/Translator