Advantage through technology?

Saturday 7th September 2024

684,000 is the number that ultimately matters. That’s how many people work for a multinational company in the automobile industry: worldwide and not just in Germany, but also in Portugal, Spain, Belgium, the Czech Republic, the USA, Brazil and China, and not just at Volkswagen AG, but also at Seat, Skoda, Audi, Cupra and Porsche: 684,000 employees.

Everything is connected to everything else. Decisions made somewhere in a company will have an impact at a completely different end of the same business or even in a different company. A government’s decision to phase out premiums for e-vehicles because the money is not currently available in the state budget means that there is no longer any incentive to swap a combustion engine for an e-car. An e-car from the lower price segment of the industry – which is still not available from VW or Audi, but which Chinese car manufacturers have been able to supply since 2023 (BYD and others) – completes the misery. Furthermore, it is still not really clear whether only e-cars will be allowed to be sold and newly registered in Europe from 2035. EU policy is not communicating any clear legal requirements. After all, it would seem they don’t want to put out our ‘burning house’ until 2045. Well, if that’s the case …

… then let’s sit down for a coffee and wait for VW to finish its work. Because almost everything has been going wrong at Volkswagen for several years now. They wanted to build the most cars in the world and replace Toyota as the number one. And now the workers who assemble the cars at VW are paying the price for this ambition. They are simply no longer needed.

Volkswagen founded a subsidiary called Cariad, which became the largest European software company after SAP and was supposed to supply the entire VW Group with its operating systems. But, unfortunately, Cariad mainly delivered only problems. VW is still struggling with these difficulties today and things are not getting any better. The important Audi Q6 and Porsche Macan models will only be launched as electric cars this year, three years behind schedule. The standardised SSP platform, with which VW wants to finally catch up with competitors such as Tesla, is not due to be ready until 2028 at the earliest. Those who make the wrong decisions at the wrong moment will be punished by time.

VW’s decline began with a betrayal of nature and the car driver. Anyone who bought a VW diesel vehicle soon realised that ‘pure bad air’ was flowing into the atmosphere from the exhaust of their Audi or Volkswagen – not clean air, as VW suggested. There are no clean diesel engines! Volkswagen was informed by the California Air Resources Board that cheating software is not tolerated in the USA. In 2019, the VW empire was still selling almost eleven million cars. Four years later, this figure had fallen to just nine million, and it still continues to fall. The company’s share price has more than halved since 2021. And so VW began to say goodbye to the combustion engine and put all its eggs in one basket: the electric engine. Now its sales are stalling. Politicians are providing no certainty in relation to planning, which means that entire factories are likely to be closed. This will probably start in Belgium (Brussels). Will Portugal (Palmela) follow suit?

VW vehicles are far too expensive, and, without your own software, you can’t sell cars in China, which is now the largest sales market. It’s better to sell bicycles. So, out of necessity, VW invested in a US start-up called Rivian (software) and formed a joint venture with Xpeng in China. It’s all patchwork.

Volkswagen and its competitors will soon realise that the global market will be almost saturated with cars and that they will have to say goodbye to many employees and even more customers in the near future, probably even in the short term. The only question is, how do you make so many redundancies socially acceptable? How many of the 684,000 employees will be made redundant tomorrow and how many the day after tomorrow? And what will those who are still employed by VW do tomorrow and the day after tomorrow? Cars are fundamentally not sustainable. Perhaps it wouldn’t be such a bad idea to start retraining for a new job now, for example as a gardener or forester.

No, that was not a joke. Many trees need to be replanted in Amazonia (Brazil) and many forests are also dying in Germany, mainly the monocultures, and need to be replaced by climate-compatible trees. In Germany, the forest is slowly but steadily dying. In Portugal, the invading species (acacias) are increasing in number. What is earned from eucalyptus is spent on acacias. In Nature, it’s a question of give and take. But the forest is the future of us all.

The interesting thing for the observer is that, once you reach a certain point, things start to happen very quickly. Today you are a global corporation, with thousands of employees assembling lots of cars. and tomorrow you are a bankrupt company. If you aim high, you may well fall very low. Everything is connected with everything else.