I lived through that period in the 1970’s and it was painful to watch the company commit suicide. The unions were completely out of control and helped destroy the company.
@grahamcampbell8297 absolutely the unions sat back in the warmth while the workers are outside in the cold and believing the unions had their best interest and as the workers suffered the union still got paid.they forced privatisation and people blame Thatcher and thatcher only did what the public demanded an end to the strikes but never try explaining it to the people. 1986 thatcher had to decide on the longevity of the UK and the long-term impact of Chernobyl the land in Scotland was and is contaminated so the milk was removed from school as Scotland had the school milk contract
England lost its indigenous car industry through similar management incompetence and Union intransigence. If things don’t change the same result is inevitable.
This is not just a problem for Germany. This is an issue for many companies in Central Europe (Czech Republic, Poland, Slovakia, Hungary....) as a large part o GDP is devoted to suppliers for the automotive industry and directly linked to German automakers. The knock-on effect will be wide spread.
Last year Volkswagen approved a 25% increase for Board members; and a 9% increased dividend for shareholders, but workers are supposed to accept a wage decrease? How about shareholders accept a few years of no dividends, and board members take a pay cut instead.
Shareholders are very important - more than workers. Why you Wonder? Because an unhappy shareholder will drop the VW Stock and as a result the stock is going down. The Problem of that is easy: if your stock is worth nothing, you become an easy Target to be bought up by an competator just to be than easily destroyed!
i wish to God that you are made to become single largest shareholder of vw . 240 billion loans hanging over your head ,profit tumbling , sales drop in double digit ,share prices halved in 2024 . And you will stick to what you said . Maybe ,maybe God will help you.
@@kgfgfg1 VW stock price has already been declining for 5 years, with traded volumes higher in 2023 than in the preceding 3 years. Shareholders have already been dropping stock, yet are being rewarded for their poor performance. Workers are right to want in on that stupidity. In fact, they are being pretty reasonable.
@@Stiffytheenlightened no one wants VW.....especially with FSD showing more than massive progress.....no one will want to drive due to FSD being safer....
Luxurious car companies like BMW/Mercedes/Porsch may still be ok because when a client pays 300,000 dollars for a car, they don't mind paying 50,000 dollars more. So high energy cost won't much affect those companies. But VW may die or vastly reduce their size in the medium term (5-10 years).
@@StiffytheenlightenedNot just that. I work with VW, Audi, Seat and more and the quality has gone down a lot. New vehicles have content issues and their vehicles just aren't that attractive anymore. Our company is bracing for the shit to shit to hit the fan
When people say about "collapse", people often think of "Roman Empire collapse" where a country ceases to exist. But hell no, no matter what happens, Germany will be still there. Even Greece who is heavily indebted still exists but much less relevant in the world. Germany will be like Greece.
He was also fighting an uphill battle, and was saddled with being head of Cariad, which was almost doomed from the start and became the "official reason" for demotion.
According to estimates from German business magazines, the labor cost per Tesla car produced at their German factory is around €1,000 - €2,000 per vehicle
once the bots start building them from start to finish they will become far cheaper....... im looking forward to it......gas cars are a pain in the butt.
@@vitspinka1 tesla has designed=in ease of manufacture. Less parts, less human involvement. Just look at how VW have probably 1000s of extra parts that need human manipulation..... Its not engineering from another world, its the thinking that " we always done it this way....". The truth is , they have had at least 5 yrs to change their ways and they chose not to.
Volkswagen are now in the same predicament as Facit was in Sweden during the seventies. Facit manufactured the best analogue calculating machine in the beginning of the seventies, at the end of it they were no more due to the development of electronic devices in which Facit didn’t believe.
For a whole decade money was cheap at 1% interest rate, and corporations loaded up on that debt. Most of it went on over-capacity, buying back shares, unjustified dividends to share holders, and Board of Directors pay. None of it went to pay off long term debt, or wage rises for workers, or ensuring worker's pensions. Now that interest rates have risen, it is the workers who are being attacked.
No wage rises? Have you looked at their balance sheet? Their payroll costs have gone up 10% every year like clockwork, despite the factory closures in China. It's currently at $50Bn per a year - $10Bn of which was for pensions. And this is for a company with a market cap of $43Bn, and around $250Bn of debt. The annual dividends payout is around $4Bn per year (less than 10% of the payroll cost), meanwhile VW made around $20Bn from shares sales last year. The shareholders aren't the problem here, they're the ones helping to keep the company afloat.
@@tomfahey2823banks should be regulated as well. Companies keeps getting overleversge. That money is not banks money. Its depositors aka citizens money
All German companies are in trouble, in my country China is flooding the market with all sorts of cars, I have seen the data all German cars monthly sales are going down, including the luxury class such as Mercedes and BMW.
VW is Germany, it’s not so much a question of owing the creditors it’s more that they own the creditors. This is very bad for all of Erurope. It’s down to terrible management and lack of foresight.
Also don’t forget they have burnt so much good will with their customers (reliability issue, dealership treatment, diesel gate) as well, at this point they might as well rebrand as VW and VAG as a whole is just toxic as a brand
VW should just go all in with XPeng. It's the only venture that will net them something positive. Buying carbon credits from them will then indirectly help themselves instead of benefiting Tesla.
they only invested in xpeng to get the tech. It's only a small piece of pie compared to what their debt problems is. GOOD LUCK to them. It's a done deal
This wont fly though. In the US, they are implementing laws against chinese vehicles with chinese software. So VW can probably kiss the entire US-Canadian market goodbye with that solution. In a way, they might as well. Also, the war in Ukraine has taught as the risk of relying too much on dictatorships. Private property is not respected in China, so any of VWs investments there can be confiscated if the communist party deems it necessary to do so. This is the risk of investing in places with no rule of law. I am not saying VW should not invest in China, but as with all else, its a risk that has to be carefully assessed and managed, something VW could have done better, but what they should certainly not do is "just go all in on Xpeng" or other chinese firms in China. For every they invest there belongs ultimately not to VW, but to the communist party.
German industry has been founded on cheap Russian energy and the sanctions supposedly against Russia have backfired as has the blowing up of the Nordstream pipeline. Add those factors to the challenges faced by legacy manufacturers transitioning to EVs anyway and it's been a spectacular own goal for Europe who are still buying Russian energy via India and Turkey at vastly higher prices
Exactly. And with sales collapsing in China, VW simply has nowhere to make enough profits to pay back that debt. At least 1 or 2 factories in Germany will have to shut down next year.
only option it seems is to send electric SKD kits from China based on the Xpeng chassis - with VW styling ..... to be assembled in Germany .... which is typically what advanced car companies do to enter "developing" markets gives you an idea how Europe has become a technology backwater ....
not so much a backwater as regressive. tamper-proof radiators for ICE vehicles? more plastic that acts like a self-destruct fuse? Recalcitrant DSG transmissions? The turbo as a third expensive element in every gas burning vehicle? They steered themselves into a cul-de-sac of irrelevance & tuned off potential buyers. Like Ford dropping their company car/people carrier Fusion for deluxe trucks & mustangs that spin out & attack pedestrians on sidewalks. All chasing cash. Now they wonder what went wrong. They went wrong. Once you toss the econobox that got your buyers in your product, you lose them for a lifetime.
About 40 years ago. Working in a grocery store meet a male from Germany. He asked me how much we made. I told him, and he said I could make double that in Germany with better benefits. All these costs to German Manufacturing has to be absorbed by the Manufacturing Companies.
Not sure what the union think they can do anything about it. They have leverage if VW still wants to make cars there. if they are closing down factories left and right, it's just made it faster.
VW totally missed the BEV transition...... So they will be going through hard times. Arrogance is what gets you in this situation. German automotive is extremely arrogant. This means they stick to producing high-margin ICE vehicles, but unfortunately the sales are now dropping and the group does not have a solid BEV strategy.
As Steven Mark Ryan put it back when the UAW opposed pay cuts, now the IG Metall union opposes pay cuts, at the risk of everyone getting a 100% pay cut when the company belly flops.
If worst comes to worst the German government will not allow this Icon to go under . Germany has no choice but to keep their automakers alive …after all the German government is responsible for all of Germanys industrial losses and failures .
You should talk about the long term cause of this: Asset inflation. Interest rates were very low for years; low interest rates are only meant for short term stimulus.
Herbert Diess (former CEO) was quite vocal with warnings that exactly this would happen and that they need to act immediately back then. Well... They fired him and wanted to continue their old ways. And here we go. I am a fan of VW and I hope they will navigate through this. Perhaps smaller, but wiser and more effective. If VW falls, it would be a disaster for Europe.
The executives won’t go short. They’ll still take every penny they can. The unions will be the final straw for VW. This is a growing problem in Europe. Sad to see the German auto industry go under, but inevitable.
Other channels on YT is saying Honda is going to buy Nissan (well they are going to form a joint venture) I'm guessing so they can segment the 28 billion in debt away from themselves and not take it on, this could be
This is not just a German problem - Europe as a whole is in deep trouble. Take a look at European Stock Markets (including the UK) they have massively underperformed to the extent that they are presently ignored by investors. There are stormy sea’s ahead,
I don’t think the heads of the union understand how any industry let alone the car industry works. If the cars being produced aren’t being sold how do they expect the company to survive? Might as well shut down all factories in Germany. That’s their best option. Then move production elsewhere.
Germany is a "first" world country. Everything are just expensive. Wages need to commensurate with the cost of living ie high salaries. Union is not to be blame on totality.
@@FrankiePo89 I agree. If I was in charge and knew this was not sustainable I’d just close all factories in Germany. Wouldn’t you ? In the end of the day they need to sell cars, which they aren’t doing because 1. The cost of production is high due to high labour costs. 2. People have better options that are cheaper. That is the reality.
@@yuvingoonewardene7920 I would try to understand wtf was going on in the industry and the direction it was heading. Then i would design cars to meet that demand. The T model ford is no longer sold for a reason. VW management screwed up here, not the union. All the OEMs are having their pants pulled down because as an industry, they have failed to meet any of the challenges we have today. Its called future shock.
I don't believe that they don't know but they are just milking out German government for subsidies and are also trying to get a huge severance packages for factory workers that they know are going to be inevitably get fired.
VW cannot go broke. The Govt will offer a loan (repayable in 2099). Then they'll team up with Chinese auto makers for tech transfer (!!!) to learn how to make good, cheap cars. How the mighty have been humbled....
My main concern is how to survive all of these financial and political crisis, especially in light of the US political power scuffle. The government has really called things more difficult for its citizens, and we can't sit back and bear all the consequences of the bad governance.
Yes VW has dept and the whole industry is in a period of change, but it increased its sale by 12% in 2023 over 2022. Chinese cars have there problems full of tech, but they are not refined cars and still have some way to go. Europe needs its car industry so I believe if push come to shove, the EU will make sure it survives. I drive a VW ID5 it’s not the latest tech, but it’s a good solid car that does things reliably I am very happy with the car.
Nissan and Honda have just entered merger as Honda has the cash and Nissan has the EV tech. Hope it works out. VW needs to shed brands and focus wholly on EV’s.
The math is absolutely baffling. The VW board demands a savings in 120.000 salaries that will total between €4 and €5 billion. At the same time, these same boardmembers, partly part of the 2 families Porsche and Piech, will pay out €1,5 billion in "dividends" to themselves and billionaire family members. And for what? For running VW into the ground and making perhaps all employees lose their livelihood. Now, THAT is how you stir up anger to the max. The poor people have to divvy up part of their measly salaries to finance the billionaires and multimillionaires who don't need it. The question is, what corrupted politicians and greedy billionaires can the board of VW depend on?
Germans can still make horse and buggys in the future because they are cheaper to make than EVs anyway. This is their mentality. The bankrupt Japanese manufacturers ALL are driving this same road to oblivion. The HUGE layoffs have begun. Major outdated gas guzzler factories are closing world wide. Consolidation and bankruptcy ahead becuse look iver there...nothing has changed.
Just like Deutsch Bank, the German Government will bail them out with loans. In the end, keeping a sick company alive (with taxpayer money) is a bad strategy-it impoverishes people while keeping Unnion workers fat and happy.
The Germans and Europeans in general say: We are europ we are Germany, we can sell the consumer a scrap metal for five times the price of the very advanced Chinese cars, and the consumer will buy it because its name is Mercedes, Volkswagen, or Audi. Thank's God for BYD.
The chap below that compares BLMC to VW is sort of right, but we only built up debts of £1 billion, not £200 Billion and by 1983 Jaguar was in profit as was Austin Rover with modest profits of £20 million, don't think VW will manage a turnaround as impressive as Rover Group did from basket case to respected part of BAE Systems. The British middle class got what they wanted, 11 million without work and zero manufacturing but now they are paying the benefits bill for that and the country is broke.
That's like saying TV should have remained in black and white, or computers should have blinkenlights and a radar display instead of a colour monitor and be at least the size of a large fridge-freezer. The VW "Beetle" was conceived in the 30s (by Dr. Porsche and you-know-who) and redesigned in the 50s. The Beatles were named after it in the early 60s. Its time has passed, it was obsolete when the Mini came in, or the Renault 5 in the 70s.
The union has to be realistic. If VW doesn’t retrench then company folds eventually. Unless the union accepts an across the board wage cut for everyone.
@@darthkek1953 it didn't benefit Germany since it was the credit for agriculture and the USA had stolen and destroyed after the end of the WW2 far more
So they have 120k workers and they complain people at the top are getting a few millions in bonuses? It's like what, if all the bosses together get 120m then it would be 1k/year/worker
70% of the “debt” is asset backed from the highly profitable Volkswagen Bank. Literally consumer car loans, that’s it. Why is it so hard to understand?
Somewhere like Germany it is going to be fixed. Labour laws are quite strict and are enforced. If you are a manager and you force a member of staff to work more than a certain number of hours both yourself and the employee are heading to a short prison term. The same applies if the employee does not take at least two weeks contiguous holiday/vacation a year. in large industries this is usually managed by site shutdown.
Most of the issues are driven by energy costs and a lack of relevant innovation... futher labour nowadays is a flexible cost depending exactly on (unsurprisingly) "what the labour is doing" - let me have a go at them...
13:16 .. "but Germans don't really like to change all that much". That's a clear insult. Germany has a problem with an aging population (like Japan) and with social warriors (like the US) but that's not the majority of the people. It may be correct to point out the influence and the consequences but that does not allow for an overgeneralization.
If the EU and other Western countries didn't have stupid emissions targets, and just let consumers decide what to buy, VW and other manufacturers would probably be fine
@@Hickalum German automakers are suffering alongside any other energy intensive industry. Germany pays 2x for American LNG vs the NatGas from Russia in 2021. Europe is a victim of American & NATO aggression & foreign policy mistakes as well as some of their own bad ideas.
VW shot themselves in the foot by offering ridiculous salaries for instance an assembly line worker at VW gets paid equal to if not more than an experienced engineer in an average german company (salary before tax of around 6000 €)
I find the obtuse nature of the labor unions amazing. Here in the United States, the unions priced themselves out of the shoe, textile, ship building, lumber, electronics, steel and automotive industries, all of which partially or completely moved out the Country to stay afloat. Completely immune from common sense, the unions decided that they would rather be unemployed than embrace reality. I have to assume that we will see VW collapse and the company reorganize as a much smaller corporation, and will shed 30-40% of its employees to stay alive. The EV joke is going to bankrupt Stellantis, Ford and GM in this Country and the environmental disaster looming on the horizon from lithium batteries will be astonishing. By the way, it is pronounced "Por-sha" and not "Porsh"
Is this debt real? Manufacturers have finance arms that lend money to dealers to buy the cars and then lend again to the final customers. Each stage brings in profits. Having very little or no debt would be a very bad thing in these circumstances.
They went into china and were making billions thinking they had caught the dragon sleeping. LOL. No, son, it was watching you the whole frieking time.🤣
The jokes on the union as us subscribers and VW know exactly how much the union will be paid ($0)due to Electric Viking keeping us in the loop😅 and VW going bust or moving operations overseas 😅😅😅
They used to make cheap reliable robust cars with great paint warranty. So now they are over priced unreliable cars with a good paint warranty. My first golf was amazing mk2 lasted 12 years and the guy after me had it 6 years. My neighbours golf spends its life in the garage with abs and warning lights on the dash.
Loved my mark 2, then had a mark 3. Both great. Stopped my VW journey there. First car was a 72 beetle. These cars may be a good fit for today, simple the parts bolted on and off easily.
Let them all go to strike and saved money for the future by no one working and made their terms after that 😂😂😂😂😂😂😂😂😂closed it when their ready to take the deal open the factories again on their terms they aren't making any money anyway
The old men running VW can look powerful and stern all they want but when push comes to shove, they will crumble like a house of cards.
They are weak underneath
Sounds like British Leyland I mean the UK car industry
I lived through that period in the 1970’s and it was painful to watch the company commit suicide. The unions were completely out of control and helped destroy the company.
UK still is financial centre but without manufacturing industry, Germany would be nothing.
Red Robbo 😂@@grahamcampbell8297
@grahamcampbell8297 absolutely the unions sat back in the warmth while the workers are outside in the cold and believing the unions had their best interest and as the workers suffered the union still got paid.they forced privatisation and people blame Thatcher and thatcher only did what the public demanded an end to the strikes but never try explaining it to the people. 1986 thatcher had to decide on the longevity of the UK and the long-term impact of Chernobyl the land in Scotland was and is contaminated so the milk was removed from school as Scotland had the school milk contract
@mrpaulhutchison249 give your sources for the Scottish milk claim
England lost its indigenous car industry through similar management incompetence and Union intransigence. If things don’t change the same result is inevitable.
Smiths! Girling! Lucas! Engineering for the (Dark) Ages! Kids, can you say, "reversed polariity?"
This is not just a problem for Germany. This is an issue for many companies in Central Europe (Czech Republic, Poland, Slovakia, Hungary....) as a large part o GDP is devoted to suppliers for the automotive industry and directly linked to German automakers. The knock-on effect will be wide spread.
Sam you are “the bees knees”
Your videos make me less ignorant
Merry Christmas to you and your family
Are you Chinese as well?
Last year Volkswagen approved a 25% increase for Board members; and a 9% increased dividend for shareholders, but workers are supposed to accept a wage decrease? How about shareholders accept a few years of no dividends, and board members take a pay cut instead.
Shareholders are very important - more than workers. Why you Wonder? Because an unhappy shareholder will drop the VW Stock and as a result the stock is going down. The Problem of that is easy: if your stock is worth nothing, you become an easy Target to be bought up by an competator just to be than easily destroyed!
Imagine that Stock marked value is an key factor for Banks to 😅
i wish to God that you are made to become single largest shareholder of vw . 240 billion loans hanging over your head ,profit tumbling , sales drop in double digit ,share prices halved in 2024 . And you will stick to what you said . Maybe ,maybe God will help you.
@@kgfgfg1 VW stock price has already been declining for 5 years, with traded volumes higher in 2023 than in the preceding 3 years. Shareholders have already been dropping stock, yet are being rewarded for their poor performance. Workers are right to want in on that stupidity. In fact, they are being pretty reasonable.
I think VW should close more factories to save costs.
Living is the most important thing.
All they need to do is flood the market, by selling all their surplus cars at a very low cost.
@@Stiffytheenlightened no one wants VW.....especially with FSD showing more than massive progress.....no one will want to drive due to FSD being safer....
Luxurious car companies like BMW/Mercedes/Porsch may still be ok because when a client pays 300,000 dollars for a car, they don't mind paying 50,000 dollars more. So high energy cost won't much affect those companies. But VW may die or vastly reduce their size in the medium term (5-10 years).
@Stiffytheenlightened How is selling a load of expensive cars at a loss going to improve their balance sheet?
@@StiffytheenlightenedNot just that. I work with VW, Audi, Seat and more and the quality has gone down a lot. New vehicles have content issues and their vehicles just aren't that attractive anymore. Our company is bracing for the shit to shit to hit the fan
Didn't expect the EV disruptions come so soon.
VW are screwed partly thanks to trying and failing to switch to EV.
Most of VW's debt Is irrelevant since it is debt to VW's own bank
Sounds like you are a German ;-)
@@user-nh1yb9mk7y Concrete numbers or it doesn't matter.
EVs are a big part of it, but it mostly comes from "unexpected" market share loss in China, where EVs and local brand are taking over.
Hi , The race is between Volkswagen and Jaguar . Who will go bankrupt first . Germany will be very similar to the UK . An economic disaster zone .
VW are a German brand, Jaguar are a Pakistani brand, Caterham are a British brand.
VW will not go they will be saved by the German government but be a shadow of themselves
When people say about "collapse", people often think of "Roman Empire collapse" where a country ceases to exist. But hell no, no matter what happens, Germany will be still there. Even Greece who is heavily indebted still exists but much less relevant in the world. Germany will be like Greece.
@@oceanwave4502 Greece has tourism as a baseline. What's Germany's baseline?
@@oceanwave4502 😂 ancient greece isn't the same country as modern greece😂 you are 100% wrong
Carbon Credits.....LOL.
Herbert Diess was right.
Of course he was ...and then they booted him
Not the only one who was right but really this is self inflected
He was also fighting an uphill battle, and was saddled with being head of Cariad, which was almost doomed from the start and became the "official reason" for demotion.
According to estimates from German business magazines, the labor cost per Tesla car produced at their German factory is around €1,000 - €2,000 per vehicle
Yes... Chinese labor is not that cheap. The major reason for VW labor costs is the amount of labor needed (automation, efficiency).
once the bots start building them from start to finish they will become far cheaper.......
im looking forward to it......gas cars are a pain in the butt.
@@vitspinka1 tesla has designed=in ease of manufacture. Less parts, less human involvement. Just look at how VW have probably 1000s of extra parts that need human manipulation..... Its not engineering from another world, its the thinking that " we always done it this way....". The truth is , they have had at least 5 yrs to change their ways and they chose not to.
@@andyfreeze4072and couldn't
@@operatorsix6933so you would rather have children in Africa dying in cobalt mines for your milk floats?
Stay classy
Volkswagen are now in the same predicament as Facit was in Sweden during the seventies. Facit manufactured the best analogue calculating machine in the beginning of the seventies, at the end of it they were no more due to the development of electronic devices in which Facit didn’t believe.
For a whole decade money was cheap at 1% interest rate, and corporations loaded up on that debt. Most of it went on over-capacity, buying back shares, unjustified dividends to share holders, and Board of Directors pay. None of it went to pay off long term debt, or wage rises for workers, or ensuring worker's pensions. Now that interest rates have risen, it is the workers who are being attacked.
No wage rises? Have you looked at their balance sheet?
Their payroll costs have gone up 10% every year like clockwork, despite the factory closures in China. It's currently at $50Bn per a year - $10Bn of which was for pensions. And this is for a company with a market cap of $43Bn, and around $250Bn of debt.
The annual dividends payout is around $4Bn per year (less than 10% of the payroll cost), meanwhile VW made around $20Bn from shares sales last year.
The shareholders aren't the problem here, they're the ones helping to keep the company afloat.
@@tomfahey2823banks should be regulated as well. Companies keeps getting overleversge. That money is not banks money. Its depositors aka citizens money
All German companies are in trouble, in my country China is flooding the market with all sorts of cars, I have seen the data all German cars monthly sales are going down, including the luxury class such as Mercedes and BMW.
VW is Germany, it’s not so much a question of owing the creditors it’s more that they own the creditors. This is very bad for all of Erurope. It’s down to terrible management and lack of foresight.
Also don’t forget they have burnt so much good will with their customers (reliability issue, dealership treatment, diesel gate) as well, at this point they might as well rebrand as VW and VAG as a whole is just toxic as a brand
I sold my e.golf … It was such a relief to get rid of it. Never again.
What do you expect from company formed by Adolf hitler
@@Hickalum what will you get next ?...
Just look how successful the EU has been at creating new EV companies
VW should just go all in with XPeng. It's the only venture that will net them something positive. Buying carbon credits from them will then indirectly help themselves instead of benefiting Tesla.
they only invested in xpeng to get the tech. It's only a small piece of pie compared to what their debt problems is. GOOD LUCK to them. It's a done deal
Absolutely not, that's the worst advice 😅😅😅
Yeah why not join a company with just $2.2 billion of debt.
Xpeng is a very small producer of BEVs.
This wont fly though. In the US, they are implementing laws against chinese vehicles with chinese software. So VW can probably kiss the entire US-Canadian market goodbye with that solution. In a way, they might as well.
Also, the war in Ukraine has taught as the risk of relying too much on dictatorships. Private property is not respected in China, so any of VWs investments there can be confiscated if the communist party deems it necessary to do so. This is the risk of investing in places with no rule of law.
I am not saying VW should not invest in China, but as with all else, its a risk that has to be carefully assessed and managed, something VW could have done better, but what they should certainly not do is "just go all in on Xpeng" or other chinese firms in China. For every they invest there belongs ultimately not to VW, but to the communist party.
German industry has been founded on cheap Russian energy and the sanctions supposedly against Russia have backfired as has the blowing up of the Nordstream pipeline. Add those factors to the challenges faced by legacy manufacturers transitioning to EVs anyway and it's been a spectacular own goal for Europe who are still buying Russian energy via India and Turkey at vastly higher prices
Exactly. And with sales collapsing in China, VW simply has nowhere to make enough profits to pay back that debt. At least 1 or 2 factories in Germany will have to shut down next year.
False. GERMANY started buying Russian gas in 1972 when it was the 3rd economy in the world. Russian gas was 25% cheaper than alternatives in the 10s.
The main problem now is lack of stability and consequences of disruptions caused by covid and the price shock of 2022
@@Nphenmost of its debt is to VW's own bank
Green party achievement. Congratulations
The German government will bail them out.
That's what both employees and management are angling for
The Government budget is not counting for that, actually they couldn’t agree on a 2025 budget as well, thats why the government fell apart.
only option it seems is to send electric SKD kits from China based on the Xpeng chassis - with VW styling ..... to be assembled in Germany ....
which is typically what advanced car companies do to enter "developing" markets
gives you an idea how Europe has become a technology backwater ....
not so much a backwater as regressive. tamper-proof radiators for ICE vehicles?
more plastic that acts like a self-destruct fuse? Recalcitrant DSG transmissions?
The turbo as a third expensive element in every gas burning vehicle? They steered themselves into a cul-de-sac of irrelevance & tuned off potential buyers. Like Ford dropping their company car/people carrier Fusion for deluxe trucks & mustangs that spin out & attack pedestrians on sidewalks. All chasing cash. Now they wonder what went wrong. They went wrong. Once you toss the econobox that got your buyers in your product, you lose them for a lifetime.
Yep. Firing Herbert Diess was the best reduction in costs VW has never made !
About 40 years ago. Working in a grocery store meet a male from Germany. He asked me how much we made. I told him, and he said I could make double that in Germany with better benefits. All these costs to German Manufacturing has to be absorbed by the Manufacturing Companies.
Another fine video, keeping us up to date with dramatic developments at the heart of Europe. Thank you so much.
Kodak were not a camera company. They were a film company. They never had a chance.
Not sure what the union think they can do anything about it. They have leverage if VW still wants to make cars there. if they are closing down factories left and right, it's just made it faster.
VW totally missed the BEV transition...... So they will be going through hard times. Arrogance is what gets you in this situation. German automotive is extremely arrogant. This means they stick to producing high-margin ICE vehicles, but unfortunately the sales are now dropping and the group does not have a solid BEV strategy.
The VW executives hope the German government will bail the company out so they can still pocket their salaries.
Government doesn't generate revenue, it only collects taxes
They all know each other so likely
VW are full of it. $200b in new investment, crap on. It just shows that they are angling for a government bail out.
As Steven Mark Ryan put it back when the UAW opposed pay cuts, now the IG Metall union opposes pay cuts, at the risk of everyone getting a 100% pay cut when the company belly flops.
How much of that debt came from all those fines they paid out for cheating on their emissions tests,it was quite a lot if I remember correctly
If worst comes to worst the German government will not allow this Icon to go under . Germany has no choice but to keep their automakers alive …after all the German government is responsible for all of Germanys industrial losses and failures .
You should talk about the long term cause of this: Asset inflation. Interest rates were very low for years; low interest rates are only meant for short term stimulus.
Never should have wasted money on electric.
Who on earth would lend them the money. Going by past performance, lending them money is a flat NO
wehave the ECB - propping up loosers in banking anf finance, and more, ever since the 2010s...
Governmemt bailout. Western world is now a firm believer of communism
Government bailout. Western world are advocated of communism.
Late stage 21st century capitalism has failed, overtaken by 21st century Chinese authoritarianism. 😢
Herbert Diess (former CEO) was quite vocal with warnings that exactly this would happen and that they need to act immediately back then. Well... They fired him and wanted to continue their old ways. And here we go. I am a fan of VW and I hope they will navigate through this. Perhaps smaller, but wiser and more effective. If VW falls, it would be a disaster for Europe.
To little and to late VW, Herbert tried to save the company.
By releasing buggy products?
The executives won’t go short. They’ll still take every penny they can. The unions will be the final straw for VW. This is a growing problem in Europe. Sad to see the German auto industry go under, but inevitable.
I don’t understand volkswagen unions. Germans are usually very racional peaple. If they can’t understand this all of them will not have jobs anymore
they understand when they have been screwed over.
@@andyfreeze4072 The South Koreans stole their milkshake... they DRANK IT UP!
Imagine how many cars they will need to sell to pay off their debt!
Other channels on YT is saying Honda is going to buy Nissan (well they are going to form a joint venture) I'm guessing so they can segment the 28 billion in debt away from themselves and not take it on, this could be
Who in their right mind is still going to hold onto their VW shares. That's a fire sale waiting to happen.
Great video. Thanks Sam. I hope VW survives but it doesn’t look good
It’s about time these German companies learn their lesson. They have been sleeping for so long, no innovation and don’t listen to the customers 😮.
This is not just a German problem - Europe as a whole is in deep trouble. Take a look at European Stock Markets (including the UK) they have massively underperformed to the extent that they are presently ignored by investors. There are stormy sea’s ahead,
they will be closing all factories sooner or later
I don’t think the heads of the union understand how any industry let alone the car industry works. If the cars being produced aren’t being sold how do they expect the company to survive? Might as well shut down all factories in Germany. That’s their best option. Then move production elsewhere.
Germany is a "first" world country. Everything are just expensive. Wages need to commensurate with the cost of living ie high salaries. Union is not to be blame on totality.
The only organization in legacy auto that’s dumber than the union is management.
@@FrankiePo89 I agree. If I was in charge and knew this was not sustainable I’d just close all factories in Germany. Wouldn’t you ? In the end of the day they need to sell cars, which they aren’t doing because 1. The cost of production is high due to high labour costs. 2. People have better options that are cheaper. That is the reality.
@@yuvingoonewardene7920 I would try to understand wtf was going on in the industry and the direction it was heading. Then i would design cars to meet that demand. The T model ford is no longer sold for a reason. VW management screwed up here, not the union. All the OEMs are having their pants pulled down because as an industry, they have failed to meet any of the challenges we have today. Its called future shock.
I don't believe that they don't know but they are just milking out German government for subsidies and are also trying to get a huge severance packages for factory workers that they know are going to be inevitably get fired.
VW cannot go broke. The Govt will offer a loan (repayable in 2099). Then they'll team up with Chinese auto makers for tech transfer (!!!) to learn how to make good, cheap cars. How the mighty have been humbled....
My main concern is how to survive all of these financial and political crisis, especially in light of the US political power scuffle. The government has really called things more difficult for its citizens, and we can't sit back and bear all the consequences of the bad governance.
EV move will bankrupt them. Crap EV's into a market that don't want them. Insanity
Yes VW has dept and the whole industry is in a period of change, but it increased its sale by 12% in 2023 over 2022.
Chinese cars have there problems full of tech, but they are not refined cars and still have some way to go.
Europe needs its car industry so I believe if push come to shove, the EU will make sure it survives.
I drive a VW ID5 it’s not the latest tech, but it’s a good solid car that does things reliably I am very happy with the car.
I was considering ordering an Id4 at the beginning of January. This has now put me in a spin! Will they be able to deliver and when?😳
Nissan and Honda have just entered merger as Honda has the cash and Nissan has the EV tech. Hope it works out. VW needs to shed brands and focus wholly on EV’s.
The math is absolutely baffling. The VW board demands a savings in 120.000 salaries that will total between €4 and €5 billion. At the same time, these same boardmembers, partly part of the 2 families Porsche and Piech, will pay out €1,5 billion in "dividends" to themselves and billionaire family members. And for what? For running VW into the ground and making perhaps all employees lose their livelihood. Now, THAT is how you stir up anger to the max. The poor people have to divvy up part of their measly salaries to finance the billionaires and multimillionaires who don't need it. The question is, what corrupted politicians and greedy billionaires can the board of VW depend on?
Germans can still make horse and buggys in the future because they are cheaper to make than EVs anyway. This is their mentality. The bankrupt Japanese manufacturers ALL are driving this same road to oblivion. The HUGE layoffs have begun. Major outdated gas guzzler factories are closing world wide. Consolidation and bankruptcy ahead becuse look iver there...nothing has changed.
I am delighted with my id3.
The German government will back vw and the ancillary businesses as essential to industrial future.
Just like Deutsch Bank, the German Government will bail them out with loans. In the end, keeping a sick company alive (with taxpayer money) is a bad strategy-it impoverishes people while keeping Unnion workers fat and happy.
👍👍
Not if they close factorys, its when they close factory's.
The Germans and Europeans in general say: We are europ we are Germany, we can sell the consumer a scrap metal for five times the price of the very advanced Chinese cars, and the consumer will buy it because its name is Mercedes, Volkswagen, or Audi.
Thank's God for BYD.
The chap below that compares BLMC to VW is sort of right, but we only built up debts of £1 billion, not £200 Billion and by 1983 Jaguar was in profit as was Austin Rover with modest profits of £20 million, don't think VW will manage a turnaround as impressive as Rover Group did from basket case to respected part of BAE Systems. The British middle class got what they wanted, 11 million without work and zero manufacturing but now they are paying the benefits bill for that and the country is broke.
There is in fact negotiation when repaying debt if the creditor thinks you pose a default risk.
Germany, bowing to U.S. demands and cutting itself off from cheap Russian gas, has
really done wonders for the German economy.
They should have stuck with the Type 1, air-cooled, Beetle.
That's like saying TV should have remained in black and white, or computers should have blinkenlights and a radar display instead of a colour monitor and be at least the size of a large fridge-freezer. The VW "Beetle" was conceived in the 30s (by Dr. Porsche and you-know-who) and redesigned in the 50s. The Beatles were named after it in the early 60s. Its time has passed, it was obsolete when the Mini came in, or the Renault 5 in the 70s.
Sam
What is the number one most indebted company?
The union has to be realistic. If VW doesn’t retrench then company folds eventually. Unless the union accepts an across the board wage cut for everyone.
Guess VW is doomed.. sad
The wheels have come off The Marshall Plan.
@@darthkek1953Marshall plan didn't benefit Germany
@@user-nh1yb9mk7y Well, it went to West Germany if that's the nit-pick you're going for.
@@darthkek1953 it didn't benefit Germany since it was the credit for agriculture and the USA had stolen and destroyed after the end of the WW2 far more
Yet, they have been kept issuing dividends.
So they have 120k workers and they complain people at the top are getting a few millions in bonuses? It's like what, if all the bosses together get 120m then it would be 1k/year/worker
Liebe es. Alles richtig.
Nobody says that
VW's primary problem is their cars look dated.
VW cars are the least desirable cars of the whole VAG group p. Give me a Cupra or Elroq any day. The ID series are horrifically dull.
ID4 sold 250k units last year, so others do like them. The trouble is, THEY'RE SELLING ALL THOSE UNITS AT A LOSS.
汽车已经是一个高度竞争的行业，如果大众汽车仍想着保持高利润，必然被市场抛弃
From a historical company that made affordable cars that are now unaffordable. EV's? Greed? New Logo VW ----- Very Worthless🚗
Reporting is one thing, making the right conclusions another.
70% of the “debt” is asset backed from the highly profitable Volkswagen Bank. Literally consumer car loans, that’s it. Why is it so hard to understand?
Who would want to buy an ICE loan book?
TONY TONY TONY. Labor is a variable cost, not a fixed cost. 😩
Somewhere like Germany it is going to be fixed. Labour laws are quite strict and are enforced. If you are a manager and you force a member of staff to work more than a certain number of hours both yourself and the employee are heading to a short prison term. The same applies if the employee does not take at least two weeks contiguous holiday/vacation a year. in large industries this is usually managed by site shutdown.
bots will sort the labor problem out.
Sam… 12 PM is noon; 12 AM is midnight.
Most of the issues are driven by energy costs and a lack of relevant innovation... futher labour nowadays is a flexible cost depending exactly on (unsurprisingly) "what the labour is doing" - let me have a go at them...
do you know Tesla are renovating a building in Nunawading Victoria to be used as a showroom?
You should calculate debt pr car produced.
It seems that only Skoda is financially healthy.
13:16 .. "but Germans don't really like to change all that much". That's a clear insult. Germany has a problem with an aging population (like Japan) and with social warriors (like the US) but that's not the majority of the people. It may be correct to point out the influence and the consequences but that does not allow for an overgeneralization.
The debt is mostly leasing business
Its like a bank
If the EU and other Western countries didn't have stupid emissions targets, and just let consumers decide what to buy, VW and other manufacturers would probably be fine
This has nothing to do with EU.
Nah, Europe is too expensive overall to compete. Perhaps in a true anarcho-capitalist world, but that is just unimaginable right now.
How come Germany was competing very nicely until the absurd emissions rules were upgraded to mandate EVs ?
@@Hickalum German automakers are suffering alongside any other energy intensive industry. Germany pays 2x for American LNG vs the NatGas from Russia in 2021. Europe is a victim of American & NATO aggression & foreign policy mistakes as well as some of their own bad ideas.
@@Nphen Where's the NATO aggression?
Wonder what IG Metal is thinking 😲
VW shot themselves in the foot by offering ridiculous salaries for instance an assembly line worker at VW gets paid equal to if not more than an experienced engineer in an average german company (salary before tax of around 6000 €)
I find the obtuse nature of the labor unions amazing. Here in the United States, the unions priced themselves out of the shoe, textile, ship building, lumber, electronics, steel and automotive industries, all of which partially or completely moved out the Country to stay afloat. Completely immune from common sense, the unions decided that they would rather be unemployed than embrace reality. I have to assume that we will see VW collapse and the company reorganize as a much smaller corporation, and will shed 30-40% of its employees to stay alive. The EV joke is going to bankrupt Stellantis, Ford and GM in this Country and the environmental disaster looming on the horizon from lithium batteries will be astonishing.
By the way, it is pronounced "Por-sha" and not "Porsh"
Gonna be nationalised.
What is German for British Leyland?
Is this debt real? Manufacturers have finance arms that lend money to dealers to buy the cars and then lend again to the final customers. Each stage brings in profits. Having very little or no debt would be a very bad thing in these circumstances.
People didnt buy vw for evs ,it was there good ice cars so thats done them.
Just wait until they have shut the factories.
They are on the books worth billions.
They are in fact worthless. When you have to admit that Ouch!
They went into china and were making billions thinking they had caught the dragon sleeping. LOL. No, son, it was watching you the whole frieking time.🤣
The jokes on the union as us subscribers and VW know exactly how much the union will be paid ($0)due to Electric Viking keeping us in the loop😅 and VW going bust or moving operations overseas 😅😅😅
It would be more than 3 plants!
They used to make cheap reliable robust cars with great paint warranty. So now they are over priced unreliable cars with a good paint warranty.
My first golf was amazing mk2 lasted 12 years and the guy after me had it 6 years. My neighbours golf spends its life in the garage with abs and warning lights on the dash.
Loved my mark 2, then had a mark 3. Both great. Stopped my VW journey there. First car was a 72 beetle. These cars may be a good fit for today, simple the parts bolted on and off easily.
by 2030 you be able to own a car anyway
Let them all go to strike and saved money for the future by no one working and made their terms after that 😂😂😂😂😂😂😂😂😂closed it when their ready to take the deal open the factories again on their terms they aren't making any money anyway
....I might add brother, its one of the most profitable companies in the world, how's BYD on that front?