Submitted byClemens Bomsdorf via Saxo Group's TradingFloor.com, [5]
- Up to 11 million cars, equal to annual VW group sales, might have to be recalled
- Volkswagen is Germany's biggest employer
- VW is seen as the country's most important company
- Family ownership of VWs near universal in Germany
- The moral demise of VW is a burden for the whole country
Maybe the US fans that called the Beetle Bug already knew the company's future trouble.
Volkswagen’s enormous scandal [6], aka #dieselgate [7], is shaking up a whole country –Germany [8]. That is not only because the car maker is its biggest private employer, it is more than that. Volkswagen [9]is Germany. With the future of the company as a main player of the motor industry at risk, the German self-perception and its image as the land of correctness and perfectionist engineers are brought into question.
Successful, but humble
Until very recently VW was just like Germany: successful, but humble. Now people in Germany have to ask themselves how it can be that the success of the biggest player in its most famous industry was partly built on misusing German engineering perfectionism for cheating.
Could it be that what made many German companies become world leaders – not accepting solutions that aren’t perfect – actually worked against them?
Zero emissions – at least until the engine is started. Photo: iStock
Fearing a management that does not take a “No, under this circumstances it is impossible” as an answer, very ambitious and talented employers instead of admitting that not everything is doable, might have used their capabilities to deny they are not perfect.
A car company like a country
Hence, something might have been seriously wrong with the company’s culture. Now, up to 11 million vehicles [10] – which equals roughly twice the January-July 2015 sales [11] of Volkswagen Group (mainly consisting of VW) – might have to be recalled.
VW shares over the last ten days
Source: Saxo Bank.
Does that mean there might be something seriously wrong with Germany as a whole as well? After all, the story of VW has mirrored the story of the whole country more than any other corporation’s.
It did so from its foundation during and by the Nazi regime [12] to the recent restoration of Germany as an economic superpower. The car maker showed that Germany cannot (and of course it should not) deny its ugly past. By facing up its history honestly, the company was able to position itself as the main pillar of the European motor industry and a force to be reckoned with internationally. (As recently as the start of this year VW announced it would soon employ more than 600,000 people world-wide [13]).
No class of its own
What VW made in the car world, Germany managed on the political and societal stage.
The company and the country are still interwoven like no others. Not only is VW the private entity employing most people in Germany and therefore extremely important for its wellbeing. The state of Lower Saxony is also its controlling shareholder [14]. It is also therefore that it attracts attention like no other. (For a satirical approach to the history of VW's failures read this article. [15])
German chancellor Angela Merkel once drove a Golf, it was sold on eBay.
How strongly even those neither working in the sector, nor living in Lower Saxony relate to VW is revealed by the term “Generation Golf [16]”. The title of one of the most famous German non-fiction books of the last 15 years has become a synonym for those born around 1970 – just as the writer Douglas Coupland made the term “Generation X” famous.
This would never have happened had not almost everybody in Germany have somebody in the family driving a VW. It is also the classless car with lawyers, consultants, teachers, workers, students and chancellors-to-be all driving a Golf without using it to distinguish themselves or say anything about their economic status.
Having not only the economic, but also the cultural importance of VW in mind, it becomes clear why the scandal is hitting Germany so hard and why there is the fear that the image of the country and its industries as a whole might suffer.
