“Fear”: Tense situation at Volkswagen – economy

In the hours before, things got really bad again. “A bang at VW: CEO Diess before the end,” was the headline of the media before the large works meeting at Volkswagen in Wolfsburg this Thursday. They had picked up and spun what that Handelsblatt unearthed: The Supervisory Board at Volkswagen is discussing its ongoing problems in the mediation committee these days. And because it is noted in the laws that such a body should be used to appoint or expel personnel – the story took its course: “The company is blocked,” one was quoted as saying.

Now that is covered with the paralysis and the pending expulsion – this was quickly pointed out by all sides, a few minutes after some had spread these riotous interpretations: We are by no means having the resignation of CEO Herbert Diess in mind, one heard about immediately from the strong labor camp. But you have to talk about a lot. It is about board appointments that are as important as they have not yet been clarified – such as compliance officer Hiltrud Werner or the still vacant IT post. And it is also about the appearance of the boss, which many perceive as rowdy – it was only after enormous pressure that he agreed to participate in the staff meeting.

The bottom line is that Wolfsburg’s future is being negotiated. Again – with the pressure steadily increasing.

That also became clear at the works meeting. Media representatives were not allowed in Hall 11 on the premises of the main plant, but all sides sent quotes, among other things, they can be used to trace what the powerful had to say: the management around Diess, the Prime Minister of Lower Saxony, Stephan Weil. And above all the works council boss Daniela Cavallo, who had invited to this first large VW meeting since the outbreak of the Corona epidemic.

What is happening most clearly at Volkswagen right now is an expression of enormous tension in view of the profound upheavals in this industry – which are particularly affecting Wolfsburg: this is where the Volkswagen brand is based. As a “volume brand”, it has to look more at efficiency and costs than in-house premium suppliers such as Audi or Porsche or competitors such as BMW and Daimler.

Diess recently spoke of 30,000 jobs that are at risk

Diess recently put a number of 30,000 jobs in the room: This is how many jobs are at risk if the efficiency of the VW brand does not increase rapidly. It was a statement in the subjunctive, vague. But she was unsettling. “As you have appeared publicly in the last few months,” said Cavallo, “I really wonder whether you yourself are actually aware of this situation here at our location and how it is received by the workforce.” Just a few years ago, the management announced that they wanted to build a million cars a year in Wolfsburg – that would be the largest car factory in the world. But instead, they will only manage 400,000 cars this year, have short-time working and a production level like the last one at the end of the 1950s. But, according to Cavallo: “It is not the plant or the employees that are inefficient, no, of course not! We simply lack the parts with which we can build our cars.”

It’s about the computer chips that are missing across the industry. Some car manufacturers still manage production to some extent, BMW for example because they treat their suppliers sensibly and Tesla because they manufacture the things themselves and – one can assume – the suppliers prefer to serve this rising star in the industry.

The purchasing department of the VW Group, however, works with tough conditions, which is not beneficial in times of shortage. And then the rare parts are distributed to the detriment of the Volkswagen brand. The chips don’t end up in the Golf or Tiguan, but in the expensive cars that generate a lot of margins, such as those from Audi or Porsche. “What we see with the semiconductors is an indictment,” said Cavallo, who has actually been very calm and quiet since taking office in May. Until now. “It is an indictment of a global corporation! And it is your responsibility, dear corporate executives!”

The works council boss complains: The boss goes hiking in the mountains instead of solving problems

But instead of these solving the situation, the works council boss complained at the meeting, Herbert Diess went hiking with colleagues, as evidenced by his social media posts. Or cycle around the factory. In fact, Diess has never understood why you are not allowed to drive on this huge factory area by bike, but only by car – and ultimately prevailed against the works council, which had safety concerns. For him a symbol of the outdated VW culture, for the works council a superfluous discussion. “We think that’s all well and good,” Cavallo etched, “but unfortunately far too few people have to work in the plant at all, so that the question of riding a bike might not be so urgent.”

And finally, she thinks dealing with “our greatest competitor” is strange. What is meant is Tesla. Again and again Diess focuses on the electric car company from the USA; Recently he even switched on his boss Elon Musk live at a management meeting.

The employees’ verdict: “The fascination that you apparently feel towards Mr Musk and the enthusiasm you put into maintaining contact with him, that is what we employees would also wish for in the face of our current major challenges in the Group,” said Cavallo, theirs Father worked in Wolfsburg one day. The employees are “clearly aware that a great deal will, and even must, change in the course of electromobility and digitization.” But instead of shaping this challenge constructively and reliably in cooperation, Diess unsettled his employees, for example by speculating about the downsizing: “You are afraid!”, Cavallo sums up the mood in the workforce, “Fear for their work, for their families , for their existence. And you keep sprinkling salt on the wound, and without ado. “

Though Diess sees the need differently. Change is too slow for him. Much too slow. Especially at the headquarters in Wolfsburg, where the heart of Volkswagen beats. “We are top in the combustion engine world,” said the CEO in his speech, which, like the entire event, was broadcast on the VW intranet. He has just ordered a Golf GTI again: “The best car in the world.” That was a lovely stroke of the soul for the Wolfsburg workers, who are mainly busy building this car.

“But a competition awaits us in the new world,” said Diess, a competition that Volkswagen has never experienced before. The car is becoming the most complex high-tech product on earth, Apple and Google are pushing their way into this market, as are Chinese suppliers who are “really good”. And set the standard: Tesla. “Even if I don’t talk about Elon Musk anymore, he’ll stay and revolutionize our industry and quickly become more and more competitive.”

The chairman’s appeal: “The next Golf must not be a Tesla!”

Tesla is developing cars around the software, that is a completely new approach, in which old successes no longer count – and because of which the Wolfsburg location has to change: “The jobs that exist today will certainly be fewer within the next ten to 15 years” said Diess. Mainly in administration at group level, but also in production and development. But other and new jobs would be added: “But not Herbert Diess or Daniela Cavallo decide about it. Customers decide by buying either a car from Brandenburg or a car from Wolfsburg.”

Brandenburg, this means the Tesla plant in Grünheide, which will probably start operations at the turn of the year. And in which Musk wants to have cars built in ten hours – which is far faster than VW production so far.

Whereby Diess put its own performance in a bad light, complained Cavallo, who spoke of “content-related nonsense”. You could build many more cars in Wolfsburg with the existing production staff – provided there were enough parts and soon the production order for a popular electric model. “It’s enough for us to keep hearing that the works council allegedly only wants to defend the old and existing,” replied the works council boss: “The works council wants change, the workforce wants change, Wolfsburg wants change!” But one thing must also be clear: change can only be achieved with VW culture.

Which brings you back to the need for discussion and the mediation committee. Because the impatient, headstrong driver Herbert Diess and the consensus-oriented VW culture will never go together ideally. Even if Cavallo will agree to his appeal: “The next Golf must not be a Tesla! The next Golf must not come from China! The next icon has to be a Wolfsburg again!”