Germany’s motor industry is in trouble:
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Germany’s NATIVE motor industry is in trouble: Tesla is expanding its Berlin Giga Factory.
VW fired its EV champion, Herbert Diess.
In Volkswagen’s heyday at the turn of the decade, then-CEO Herbert Diess and Tesla chief Elon Musk had an unusual bromance, often heaping praise on one another’s automotive achievements.
Diess hailed Tesla as the benchmark for success, while Musk went so far as to declare the Volkswagen boss was “doing more than any big carmaker to go electric.”
If only words could fuel a business.
Diess was fired to protect VW’s legacy fossil fuel burning business. a fate predicted by The Innovator’s Dilemma.
Based on a truly radical idea—that great companies can fail precisely because they do everything right…
The Captain
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Diess was part of the problem. The decline started when Martin Winterkorn resigned due to the diesel scandal. Winterkorn wanted to make VW bigger than Toyota, and seemed to understand that product quality and customer service were important in realizing that ambition. Since he left VW product quality has crashed, while prices have soared. It’s the same business model that Ford and Stellantis are pursuing: build poo, charge a lot, make lots of profit. My VW, built 10 years ago, during Winterkorn’s administration, has been excellent. I wouldn’t touch their cars now, loaded with gimmicks like illuminated grills and umpteen color “ambient lighting”, but the head gasket blows at 15,000 miles. In recent lists of the “10 worst cars in the US”, the VW Jetta and Taos both appear.
And VW’s solution is the same as Ford and Stellantis: drop the low priced models, send production of what is left to the third world, where people work for peanuts. I predicted, a few weeks ago, that Ford reopened it’s plant in India, to build the next gen Escape for the US, so Farley can sell the car at the same, or higher, price than the current model, and meet or exceed his higher profit goal. Meanwhile, Louisville Assembly is closed and thousands more USians are reduced to flipping burgers.
Steve
That true. I’ve always had VW/Audi cars and the current Q5 I have hasn’t been trouble free. It will be my last car from the group.
Edit
Just came across this:
VW’s layoffs and Germany’s current recession have a simpler explanation, namely, its acquiescence to the US blowing up the Nord Stream pipeline and the affordable energy it provided.
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Meanwhile strong commitment to green energy means EVs are the future (or very expensive green fuels). Can the European auto industry adapt and compete?
Major cost cutting is a logical ingredient. Or the industry folds.
A Drunken Evening, a Rented Yacht: The Real Story of the Nord Stream Pipeline Sabotage
https://www.wsj.com/world/europe/nord-stream-pipeline-explosion-real-story-da24839c?st=xir6glrvm7fxrf3&reflink=desktopwebshare_permalink
Private businessmen funded the shoestring operation, which was overseen by a top general; President Zelensky approved the plan, then tried unsuccessfully to call it off
The Ukrainian operation cost around $300,000, according to people who participated in it. It involved a small rented yacht with a six-member crew, including trained civilian divers. One was a woman, whose presence helped create the illusion they were a group of friends on a pleasure cruise.
“I always laugh when I read media speculation about some huge operation involving secret services, submarines, drones and satellites,” one officer who was involved in the plot said. “The whole thing was born out of a night of heavy boozing and the iron determination of a handful of people who had the guts to risk their lives for their country.”
DB2
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Bob,
Believe that yacht story if you wish. But as everyone knows, the CIA uses the WSJ, the WP, etc. to plant its cover stories.
But let’s say --for the sake of argument-- that Ukraine was behind the blowing up of the pipeline. Whom did that crime hurt? Certainly not Russia in the immediate or the long term who merely rotated into other energy markets, as well as put together an alliance of allies whose GDP now exceeds that of the collective Anglosphere.
You have heard of the BRICS, right? and have been following what’s come out of their annual meeting in Kazan? namely, an effective replacement for SWIFT, the IMF, etc. that will further diminish the role of the $US dollar in trade settlements, resulting in increased inflation here in the US.
So, again. Why is VW laying off workers? Because it acquiesced in the blowing up of the pipeline --by whomever-- because it acquiesced in the US plan to expand NATO eastward via Ukraine despite the majority of Ukrainians wanting no part of being in NATO.
Got a citation???
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Uh, no. There is no replacement for SWIFT. Don’t take my word for it Vladimir Putin said so. By the way, SWIFT is currency agnostic. But cross-border payments are a lot easier if everyone uses the same currency and there has to be enough liquidity in that currency to facilitate the payments. That means dollars with the Euro in distant second.
You are correct, BRICS wants to be an alternative to IMF–that’s why it was created and that’s what it mostly does. BRICS loans are also mostly denominated in good old US Dollars. Why? Because China has tight controls over its capital markets, and nobody in their right mind wants Rupees or Rubles. That means if BRICS wants to be a player as a development bank, they need to play with dollars. So that’s what they do.
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syke,
You’re not paying attention to what Putin meant.
Whether the collective West wishes to continue using Swift (and the rest of the US instituted financial structures) is of no concern to the Global South. They intend to create alternatives for themselves and escape the abuses the US wishes to impose upon them.
The process of creating those alternatives won’t be an overnight thing. But it is an inevitable thing, as is the decline and increasing irrelevance of the US empire.
It didn’t have to be that way, as Putin said in his address. SWIFT worked perfectly well. But the US chose to weaponize it. The consequences of that choice means persistent high inflation here in the US, if not a depression greater than the '30s, which will be A Very Good Thing if it puts an end the US’s endless, pointless wars of choice for their no longer being able to be financed with printed money.
Germany is losing plants and car market share as Central Europe goes to supply side economics. Relative costs have risen. Not just ng but Deutsche government subsides are harder to fund roads utilities etc…
China is dragging out their crossover to supply side economics because their party is the height of ignorance. This will cost China.
The US gets the market with Mexico Japan and UK.
The UK will do excellently in the automotive industries.
What is left of the UK auto industry? I thought it has all been acquired by international leaders.
Correct but the UK is retooling for decades to come.
Remember how wonderful German cars were and the growth of their automotive industry? The glory of German workers? Anyone can do that if the economic conditions are right.
Don’t think so. The driving force for most international relations is economics. The two most powerful economic entities in BRICs are China and India. Both depend on exports to the US for growth.
Supplanting the dollar as the world’s reserve currency will significantly weaken the dollar. A weaker dollar means that imports into the US become more expensive.
Ask your average Chinese and Indian business people how they would feel about Chinese and Indian policies that cause declining exports to the US.
It will also mean persistently high unemployment and deflation in China and India. Where is all that overproduction going to go?
I won’t take BRICs seriously until China undergoes the massive economic and banking reforms necessary to become less dependent on exports, when India opens up to freer international trade, and when both countries allow their currencies to consistently float in the free market.
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And they have deep pockets and lots of patience.
I’m in the middle if a book by a business professor from Harvard that reviews the business success of the chemical and drug industries.
Few of the chemical companies from the 1960s survived. He rates all as failures except Dow and Dupont. And they merged and then split not the same companies.
Survivors invested in research and built strong technology bases during the era of petrochemicals and plastics. Broad diversification efforts failed.
Most chemical companies saw chemical markets maturing and margins squeezed. Many switched to drugs to follow gene technologies. Often with new names like Aventis or Sanofi.
Yes, leopards can change their spots they say but it takes a while. A successful corporate culture is difficult to change or copy.
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Both export to the US. But absent US buying, would those economies collapse? I doubt it. The world doesn’t need the US, and it would be better off if the whole of the US, from Cali to NY, fell into the sea. Since 1945, the US has overthrown some 80 to 90 governments and killed an estimated 60 million civilians. That’s something the world doesn’t need more of.
Yeah, I’m a US citizen and on my Mom’s side of the family have been in this country since the early 1700’s. But what the US is currently doing with its endless, pointless, genocidial wars is shameful, never mind not being in our own best interests.
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The world on its own prior was doing worse.
Remember when other people pull the trigger they really have never pulled the trigger someone else magically has.
How do you define genocide? None of the US involvements are genocidal. Israel is not committing genocide.
How do you define it?
The Russians have armed the Sudanese. There are 12 million refugees. Perhaps 1 million people in Sudan will die of starvation in this coming year. You can ignore that since bigotries might not match your needs.
There are hundreds of young Ivy League students who have listened to the bigoted approach to Israel and not known the professors were just making things up. Sending the students on a long chase. The students are wasting their time. Many of them will drop out of school because the studies won’t be successful. The professors involved will feel they exercised power over these students.
There are dictators who really have never ruled their countries. Shameful. The Jews are held accountable for running their countries. It is called scapegoating. Their publics get used by the dictators. Dictators kill and torture their own people.
Interesting how suggestible dictators find many people.
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Perhaps not collapse, but the people running the governments could change.
As bad as the US may be I suspect our human rights record is exemplary compared to the BRICs collection.
Try making a similar statement about China in China on Chinese social media. Or Russia. Or Iran.
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As everyone knows, the ICJ has documented that Israel has been committing genocide.
As everyone also knows, Israel has been commiting genocide against the Palestinians since 1948.
As everyone also should know, those pograms were planned in the early days of the Zionist movement. Not by all the founders, but by some within the movement.
You can deny those the facts, but your denial won’t change the facts.
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