"Death penalties should be a permitted aspect in political discourse"
Detroit was the epitome of American automobile production, but it experienced a downfall. The car manufacturers went bankrupt first, followed by the city itself after the financial crisis. Andreas Knie, a mobility researcher, believes that Volkswagen and Wolfsburg are heading for the same fate. He attributes this to an "arrogant management" that neglected clear signals from China. Can the decline be avoided? Knie emphasizes the importance of humility and the recognition that strategic mistakes have been made. "If the customer wants something else, I'll build something else," he says in the "Climate Lab" of ntv. Despite the grumbles from the workforce during wage negotiations, major cuts cannot be stopped: "Volkswagen and Wolfsburg will bleed and will need to reduce their workforce by half," predicts Knie.
ntv.de: Is Wolfsburg really becoming the German Detroit?
Andreas Knie: While it would be a long journey, the decline is unavoidable. Detroit was not just an automobile city, but it also produced Motown music. Despite extreme poverty, the city was vibrant and diverse. The decline began after the riots in 1967/68. When I visited Detroit in the 90s, the depression was palpable. There was nothing left of its former glory.**
What about Wolfsburg?
The signs of decline have been apparent since the 2000s. Volkswagen's largest market is China, which is shrinking. At one point, nearly 60% of all cars were sold there. In 2006, China clearly stated its direction: battery-electric vehicles are the future. Volkswagen, however, chose a different path, saying: "We don't want that. We'll go our own way." I witnessed this firsthand during Volkswagen's presentation of its program in Shanghai and its explanation to the Chinese, alongside Audi colleagues, that they were making a mistake and betting on the wrong technology.**
Did Volkswagen go to China and claim that electric cars are nonsense?
Yes. Volkswagen was arrogant enough to tell the Chinese that the world was headed towards diesel engines. They were more powerful, more efficient, and better for the environment. This is coming back to haunt them now. It's crucial to identify the cause of the crisis, and this mismanagement has been ongoing for 15 or 20 years.**
Can Volkswagen and Wolfsburg be saved? It doesn't sound hopeful from your perspective.
Volkswagen found itself in a similar situation in the 70s. It only had one car, the Beetle, with an outdated boxer engine, but no replacement. When their top executive, Heinrich Nordhoff, suddenly passed away in 1968, Volkswagen was on the brink. Wisely, they acquired the then NSU Auto Union. Audi supplied Volkswagen with water-cooled combustion engines, resulting in the creation of the Golf. Volkswagen was able to save itself because it recognized its mistakes.**
So, there's a blueprint for a return to the top of the automotive industry; Volkswagen is now partnering with Rivian, providing them with electric vehicle technology.
Volkswagen is essentially a German corporatist model, where all interests are integrated and balanced: employers, employees, the city - it's a conglomerate or even a combine. It won't file for bankruptcy, but Volkswagen and Wolfsburg will bleed and need to reduce their workforce by half. The value creation will decrease, and there will certainly be plant closures. But if Volkswagen wants to be saved, its management might want to show humility and admit their errors. That would be the first step.
Do you really think the workforce must be halved to put Volkswagen back on track?
I'm surprised by Volkswagen's lack of flexibility. China, their largest market, is seeing a decline in combustion engine registrations and an increase in electric vehicle registrations. Chinese consumers want electric vehicles, but not the ones Volkswagen produces. Even for the European and American markets, Volkswagen offers wrong and overly expensive products. This isn't due to high wages, but rather the continued production of heavy cars with thick metal and heavy doors. People immediately recognize, "This is a Wolfsburg product."
Are electric cars not like that as well?
They're good, but their quality is often criticized. Electric vehicles are like smartphones. The hardware is dependable, but less noticeable. What makes the car interesting for customers are the software features that are regularly updated through air interfaces. You don't have to take the car to the workshop for an update. The car is a computer that can be turned on and off. This was unthinkable for German car manufacturers.
But isn't this primarily a management issue? After all, many people in Germany still prefer combustion engines because they don't trust electric vehicles. If I'm driving to Italy on vacation, where should I refuel? How long will that take? These questions are raised.
People are practical. We've studied this for 15 years, and we can't find this resistance. People know that the future is battery-electric. And anyone who has ever driven an electric vehicle will not want to go back. But take my younger sister. She went to a dealership this year to buy an electric car. What did the dealer say? "Wait a while."
Because then he won't make any money from workshop service?
Absolutely, electric cars essentially operate with minimal maintenance costs. My associates and I have been conducting test purchases for a decade, yet German dealerships are reluctant to sell electric vehicles. Questions like "Where can you charge them?" and "Can the power consumption be adjusted or minimized?" remain unanswered. The dealer handed my sibling a 500-page manual, suggesting reading it would provide clarity. Despite the hefty price tag, my sister opted for an electric vehicle, paying nearly double for it than a combustion engine would have cost. There aren't any electric cars under 30,000 euros available, and since the electric car market isn'
Is it suggested that Germany is fundamentally an oil-driven vehicle economy? This argument is gaining traction as politics often begins by offering scrapping or car purchase incentives to boost the economy first.
This scenario is not unfamiliar; recall the diesel controversy. There are still vehicles with manipulated software available on the market today. The Federal Motor Transport Authority is grappling with withdrawing these cars from circulation, but it treats this as a minor infraction. Imagine the uproar if such an issue occurred within the food industry: a yogurt product where the contents don't match the label description.
Indeed, there's a deep emotional attachment towards conventional vehicles in Germany. This ties into their cultural heritage. We create the world's most advanced combustion engines here. Diesel vehicles are highly efficient, serving as mobile chemical plants. Currently, however, no one's purchasing these vehicles, not even at reduced prices. This trend is prevalent not just in China, Europe, or the US but also in Africa, where the future lies in battery-powered vehicles. Unfortunately, the German automotive industry lacks the self-awareness and American pragmatism to adapt to market demands by saying, "The customer wants something different? I'll make something different." This reluctance has led to a situation similar to Detroit.
Can we still steer the situation in a different direction?
Individuals like Herbert Diess have attempted to correct the course, but not everyone in Wolfsburg is oblivious to the issue.
During that time, Elon Musk was a frequent guest at VW.
Diess adopted Musk as a role model but veered off course by becoming overly infatuated. This infatuation eroded the trust of the influential Porsche and Piech families, who eventually halted the experiment. Now, we need an individual who advocates for a new approach at VW, emphasizing software over hardware, building affordable products, and being open to various technological paths.
But aren't other significant forces within VW like the state of Lower Saxony and the most powerful labor council in Germany also accountable for change in the face of the crisis? They oppose job cuts, a taboo subject in Germany.
Both the IG Metall and the new labor council acknowledge that transformation is necessary. Even within the IG Metall, individuals had long advocated for manufacturing a different type of car but were in the minority against the old labor council, which collaborated closely with management and endorsed their views. The prevailing culture at VW was to believe it had the most advanced technology. Hopefully, the new labor council chairperson will cultivate a different culture and provide a balance to management.
However, there's a demand for maintaining the status quo. If the plants aren't fully utilized, and no one is laid off, it amounts to paying individuals for idle work. Isn't it essential to accept that job cuts are part of a crisis, and these individuals can be repurposed for future industries that require skilled workers?
In Germany, we tend to reject change and shy away from taking risks. There's no tolerance for trial and error, or experimentation.
Likely, a new federal chancellor will be elected in February. Will the situation in Germany improve, or will we revert to managing as we did during the Merkel era?
Honestly, the grand coalition was more effective in handling the situation than the traffic light coalition, even if the FDP's role in the past was instrumental. However, all parties now understand that industry policy needs to evolve moving forward, even in the face of opposition. You can't preserve everything; we must permit a form of economic euthanasia. Unfortunately, we haven't developed this mentality in Germany yet. That's why we kept coal and steel alive for an extended period. But people are capable and eager to change; however, they need the opportunities to do so.
In light of the ongoing decline in Volkswagen's largest market, China, which is transitioning towards battery-electric vehicles, the question arises: Is Wolfsburg, like Detroit before it, heading towards a similar fate in the realm of electric mobility? Andreas Knie, a mobility researcher, has warned about Volkswagen's "arrogant management" that has neglected the clear signals from China, potentially leading to strategic mistakes.
As Volkswagen grapples with the shift towards electric mobility, Knie emphasizes the importance of humility and recognizing these mistakes. He suggests that if the customer wants something else, Volkswagen should be willing to adapt and build something else, a sentiment that could be crucial in navigating the challenges of electric mobility.
