Volkswagen’s Choice: Fire Union Workers and Cut Costs, or Go Bankrupt

[edyvw]

VW should just make better cars. All the money they'd save on warranty claims would prevent them from having to close a factory

Warranty is not the problem here. The problem is they don't have a strategic game. Like I said, they have PHEV in Europe, but not here. Everyone is jumping on PHEV bcs. practicality, yet VW is sitting on side and thinking how to eliminate physical buttons and save some buck.
I mean, this is just an example. The strategic loss could be seen when they introduced the latest Audi A6 and those weird screens. They totally screwed Audi. Audi is not even close to being the competition in the luxury category.

 

[dubber09]

You just admitted that EU is at war with Russia. But so is US.
Check volumes of gas EU is getting from Azerbaijan at the moment compared to what they buy from Russia.

 

[daves87rs]

Bottom line here- it will happen, whether the government wants it or not. Unlike the FCA/GM fiasco , there will be no saving here. The only way VW survives the next 5 years is to do what is needed.

Expect the UAW to be watching…..as they very well will be the next example…….

 

[JHZR2]

VW Brand is too expensive vs Chinese competitors, they didn't jump on the hybrid train like.everyone else, and consumer EV subsidies had just ended.

I was wondering about that. Where are Chinese dumped vehicles allowed? Are they undermining home markets for VW?

There’s a fine balance between the Unions wanting too much, and the worker being taken advantage of by the executive layer wanting too much. I have to wonder if with an American style work requirement, the labor costs in Europe could be reduced by 20%.

 

[SC Maintenance]

Digital transformation is the biggest initiative in manufacturing companies. AI is gonna kick down the door.

Oliver Blume: Transformation in the automotive sector, with the key issues being around digitalization, sustainability, and electric mobility, is the biggest upheaval we have seen in the history of our industry. It's so much more than just changing technology, too: new organization and processes also play a key role.

Deep learning, Industry 4.0, Six Sigma, TQM, Robots, machine vision. All things that were going to shatter the manufacturing industry, but at best made marginal improvements. If your already automated, AI might at best improve the speed or the PPM marginally, at great expense. You can get there now if you actually want to. Many just won't spend the money. And there is no labor to replace anymore, so there is no cost savings available to spend on AI.

Where AI will kick down the door is service industry stuff. General practice medicine, paper processing like insurance and banking. Anything that has a high labor content and can be digitized, or is already digitized. For example, do we need 200,000 IRS employees if AI can look over your taxes and pass / fail it, or process your passport, issue your drivers license?

 

[edyvw]

You just admitted that EU is at war with Russia. But so is US.
Check volumes of gas EU is getting from Azerbaijan at the moment compared to what they buy from Russia.

You really have a hard time understanding this. For war, you need one side. Russia attacked Ukraine and started the war, other side has two options: surrender or fight. Considering what prick Putin is, generally experience with Russians throughout history, it was easy to choose the side.
Volumes from Azerbaijan are low bcs. Germany wanted Nord Stream, bcs. closer, cheaper etc. Not strategically smart, but....
The southeastern line is still being built. It does not happen overnight.

 

[edyvw]

Bottom line here- it will happen, whether the government wants it or not. Unlike the FCA/GM fiasco , there will be no saving here. The only way VW survives the next 5 years is to do what is needed.

Expect the UAW to be watching…..as they very well will be the next example…….

WHy is FCA fiasco? Chrysler/JEEP/Dodge would not exist today if they were not sold to FIAT. FIAT was only option for those companies.
GM repaid loans to the government long time ago.
VW is far from that scenario. VW does not have those issues. Chrysler/GM in 2008 were in a position that VW would be in 20 years if they didn't do something.

 

[Jetronic]

I worked for VW in the US many years ago. My sense was that the workers, me included were anti-union. We voted no several times.

Don't confuse USA unions with the ones in Europe, they are totally different beasts

 

[4WD]

Germany's move away from nuclear power has also been a factor.

(Edit: @edyvw beat me to it - I should have read through the entire thread before commenting )

They have been off/on with fracking to the point that operators don’t see it as stable policy - investing elsewhere …

 

[edyvw]

I was wondering about that. Where are Chinese dumped vehicles allowed? Are they undermining home markets for VW?

There’s a fine balance between the Unions wanting too much, and the worker being taken advantage of by the executive layer wanting too much. I have to wonder if with an American style work requirement, the labor costs in Europe could be reduced by 20%.

The key problem here is that the Chinese are taking advantage of everyone. They know everyone wanted access to the Chinese market because. population. So, the stipulation for operating in China is insane. At the same time, they allowed Chinese companies to start gaining access in EU. China is slowing big time, and has a lot of economic issues. The market is saturated. On top of that, younger generation does trust Chinese auto makers.
VW has to become bit smaller and leaner. But, then they have also issues with Germany as it is, and EU.

 

[dubber09]

Calling names isn't an argument.
8 years of constrain not interfering while Ukraine was killing both Russians and Ukrainians in it's own East speaks for itself.
Russia acted after NATO established bio labs in Ukraine and was to place foothold there, that was a direct and very serious threat.
National security as they say in US while deploying troops across pond.

 

[JeffKeryk]

Deep learning, Industry 4.0, Six Sigma, TQM, Robots, machine vision. All things that were going to shatter the manufacturing industry, but at best made marginal improvements. If your already automated, AI might at best improve the speed or the PPM marginally, at great expense. You can get there now if you actually want to. Many just won't spend the money. And there is no labor to replace anymore, so there is no cost savings available to spend on AI.

Where AI will kick down the door is service industry stuff. General practice medicine, paper processing like insurance and banking. Anything that has a high labor content and can be digitized, or is already digitized. For example, do we need 200,000 IRS employees if AI can look over your taxes and pass / fail it, or process your passport, issue your drivers license?

Everyone is struggling with digital transformation. It's hard.

 

[SC Maintenance]

You just admitted that EU is at war with Russia. But so is US.
Check volumes of gas EU is getting from Azerbaijan at the moment compared to what they buy from Russia.

If only we gave Putin (Kazakhstan, Georgia, Donbass, Syria, and Chechnya - twice - had his bottom handed to him first time, so second time they just brought in Artillery and leveled the whole place). No one cared about those other places - wrong ethnicity.

Russia has been at war with someone constantly from the time of the Czars. There not a rational country.

 

[edyvw]

Calling names isn't an argument.
8 years of constrain not interfering while Ukraine was killing both Russians and Ukrainians in it's own East speaks for itself.
Russia acted after NATO established bio labs in Ukraine and was to place foothold there, that was a direct and very serious threat.
National security as they say in US while deploying troops across pond.

Dude, check yourself out.

 

[edyvw]

If only we gave Putin (Kazakhstan, Georgia, Donbass, Syria, and Chechnya - twice - had his bottom handed to him first time, so second time they just brought in Artillery and leveled the whole place). No one cared about those other places - wrong ethnicity.

Russia has been at war with someone constantly from the time of the Czars. There not a rational country.

That is the only way they can sell a perception of power. You create a problem, and you then have to be part of resolving it=You are important!

 

[daves87rs]

WHy is FCA fiasco? Chrysler/JEEP/Dodge would not exist today if they were not sold to FIAT. FIAT was only option for those companies.
GM repaid loans to the government long time ago.
VW is far from that scenario. VW does not have those issues. Chrysler/GM in 2008 were in a position that VW would be in 20 years if they didn't do something.

Sorry, I meant the issues back in 2008, not FCA. Not sure how well it worked for them long term, since they continue to be mismanaged……

GM’s push into EVs is going to put them in the same grave if they truly think EV is the future….. they consumer is pushing back about being forced to- look at Toyota/ Honda to see how it should be done “kinda” right,,,

Oh it has one of the same big issues that we have here- the high labor costs. Cost cutting is the future…….

 

[daves87rs]

The key problem here is that the Chinese are taking advantage of everyone. They know everyone wanted access to the Chinese market because. population. So, the stipulation for operating in China is insane. At the same time, they allowed Chinese companies to start gaining access in EU. China is slowing big time, and has a lot of economic issues. The market is saturated. On top of that, younger generation does trust Chinese auto makers.
VW has to become bit smaller and leaner. But, then they have also issues with Germany as it is, and EU.

True.

Makes me wonder how long before they force themselves into our market here.

 

[edyvw]

Sorry, I meant the issues back in 2008, not FCA. Not sure how well it worked for them long term, since they continue to be mismanaged……

GM’s push into EVs is going to put them in the same grave if they truly think EV is the future….. they consumer is pushing back about being forced to- look at Toyota/ Honda to see how it should be done “kinda” right,,,

Oh it has one of the same big issues that we have here- the high labor costs. Cost cutting is the future…….

Ah OK.
As for FCA, there is no way JEEP/Chrysler/Dodge would see light of the day in 2010. They would close everything and die as brands.
FIAT was absolutely only available option. They needed some brand to come back to the US. No one else wanted to touch Chrysler. They do have some issues, but JEEP/Dodge etc. are in much better place today than they were back then.

 

[edyvw]

True.

Makes me wonder how long before they force themselves into our market here.

They won't just like that. Relations are really cold. We also have interest in accessing their market. Boeing, General Electric, P&W, Oracle, etc. We export A LOT to China.

 

[dubber09]

If only we gave Putin (Kazakhstan, Georgia, Donbass, Syria, and Chechnya - twice - had his bottom handed to him first time, so second time they just brought in Artillery and leveled the whole place). No one cared about those other places - wrong ethnicity.

Russia has been at war with someone constantly from the time of the Czars. There not a rational country.

That is the only way they can sell a perception of power. You create a problem, and you then have to be part of resolving it=You are important!

You guys are hilarious, I'd like to hear how many wars Russia started, whatever timeframe you choose. Then check how many US started. Don't forget to check geography where it all happened too.
I don't think I called anyone names.