Post by karl on Apr 29, 2009 13:11:40 GMT -7
Some may ask: What has this to do with Poland. Perhaps nothing, but perhaps very much, if any Polish people are currantly employed as a temporary worker in a German VW Plant. For soon to be, 16 500 to be dismissed as a cost cutting measure.
The life blood of Germany, is manufacturing, with the subseqent produced product, be exported to purchasing customers.
With this, is of simular, exporting facturies for foreign located production of German products for local consumption. In as such, the spin off is, work position opportunty for the people in that regin. As of this, a win win situation is gained by all.
But, as very well known, one of the industries struck very hard, is the auto industry as very well exampled not only in Europe, but that also in North America.
The following is an interview with VW CEO for his inpute and analysis as an expert.
SPIEGEL ONLINE
03/02/2009 04:32 PMINTERVIEW WITH VOLKSWAGEN CEO
MARTIN WINTERKORN
The Auto Industry Crisis 'Is Truly Brutal'
Volkswagen CEO Martin Winterkorn speaks with SPIEGEL about government bailouts for competitors, the worldwide slump in demand for cars and VW's chances of surviving natural selection in the auto industry.
SPIEGEL: Mr. Winterkorn, should the (German) government rescue Opel?
Martin Winterkorn: The government should stay out of it. It is legitimate for the government to come to a company's aid with isolated loan guarantees, but this should only apply for a transitional period. The government cannot become a bailout organization for companies on the verge of bankruptcy.
SPIEGEL: Is Opel on the verge of bankruptcy?
Winterkorn: I cannot be a judge of that, but it would, of course, be regrettable. All I know is this: The bailout of General Motors is not easy, given the intricate web of relationships that has grown over the years. Imagine if we wanted to spin off Audi today. I don't know how Audi could survive if the VW Group were to stop supplying this subsidiary, be it with parts, technology or expertise.
SPIEGEL: General Motors and Chrysler are almost broke. Fiat's chairman has said that the company cannot survive on its own. Saab has instituted bankruptcy proceedings. Is an elimination contest taking place in the auto industry today?
Winterkorn: It looks that way. I have just returned from China, where there are still about 200 different automobile makers. A weeding-out process is also take place there.
SPIEGEL: Aren't you at least somewhat pleased by the threat of your competitors' demise, because it makes the business easier for the VW Group?
Winterkorn: Of course, if one player disappears from the field, the others will see their opportunities improve. But no one escapes this sort of crisis unscathed. It starts with the discounts with which faltering manufacturers hope to revive their sales. In doing so, they bring down prices across the board. And then there are the suppliers. If one automaker fails, Bosch, Mahle, Conti and other suppliers have a problem. Their plants no longer operated at capacity, and it becomes more difficult for VW to negotiate attractive purchasing prices. It isn't fun for anyone.
SPIEGEL: A number of governments plan to rescue the auto industry in their countries with billions in rescue funds. The United States is bailing out General Motors and Chrysler. France is helping Renault, Peugeot and Citroën. Will the companies surviving in the end be the ones that get the most support, and not necessarily the healthiest ones?
Winterkorn: That could happen, which is why I take a very critical view of such government assistance programs. They're a step back to a distance past. Who are we, after all? We are in Europe, and we have the EU. Under these circumstances, France cannot massively support its industry and at the same time require the automakers to close their plants in Eastern Europe, if any have to be closed.
SPIEGEL: The German government also wants to help the auto industry. It has already earmarked €1.5 billion ($1.88 billion) for scrapping bonuses. Doesn't this chiefly promote the purchase of small Italian and French cars?
Winterkorn: We also benefit from it, and that's why such programs are okay. They do not exclusively help the companies in one country. It is important to ensure that we too will experience a significant boost as a result. And that is the case. Normally, about 2,000 people a day order a Volkswagen in Germany. That number jumped to more than 6,000 in February. Dealerships have been staying open until 10 p.m. on Saturdays. Based on order volume, this will be the best February in many years.
SPIEGEL: But doesn't the scrapping bonus mainly improve sales of the Polo, which is made in Spain?
Winterkorn: No. Sales of the Golf, the Touran and the Passat are also up. And how many parts for the Polo do you think are made in Germany? The engine, transmission, parts of the chassis, the steering system, sheet metal parts and steel -- a total of 60 percent. That's why the scrapping bonus is clearly having a positive impact on employment. But I do not believe that the amount of money budgeted for the plan is enough. The program should definitely be extended. Besides, the government takes in as much money in sales tax revenues as it spent on the bonuses.
SPIEGEL: If the scrapping bonus is really working, that is, if your order volume is up so significantly in February, why did VW reduce working hours for its employees?
Winterkorn: We are seeing this positive development in Germany, and it's important also to talk about that in the crisis. But the negative tendencies are, of course, the dominant ones. In January, car sales declined by 37 in the United States, by 28 percent in Europe, by 20 percent in Japan, and so on. Things are in decline everywhere. That's what makes this crisis so dangerous. It is truly brutal.
SPIEGEL: You have worked in the auto industry for almost three decades. Have you ever experienced a crisis like this one?
Winterkorn: None of us has ever experienced such a tailspin. There has been excess capacity in the industry for a long time. We were able to handle it, but then came the financial crisis. Even healthy companies are having trouble getting credit from the banks. This creates an explosive mix, and no one is quite sure what else we can expect.
SPIEGEL: Governments worldwide have had to nationalize banks to save them. Some countries even face the threat of national bankruptcy. Do you believe that the political world has responded appropriately to these challenges?
Winterkorn: The grand coalition in Berlin certainly has. Chancellor Angela Merkel, Finance Minister Peer Steinbrück and the junior ministers have acted very prudently so far. And if we manage to overcome this crisis with common sense and not too much new debt, things will eventually turn around. But I am not ruling out the possibility that things could get drastically worse first. Imagine this continuing for another two or three years. Then we won't just be talking about reduced working hours.
SPIEGEL: Does VW have to lay off workers and close plants? Productivity rises by 5 to 10 percent each year. If you want to secure the 329,000 jobs within the VW Group, sales will have to grow substantially. But now sales are even shrinking.
Winterkorn: At this point, no one in our company is considering layoffs or the like. By reducing working hours, we can ensure that no cars are being produced for warehouse inventory. Besides, we have a 35-hour workweek, which we can reduce to 28 hours. This allows us to cut back production and yet hold on to our core workforce. I don't anticipate any problems in this regard for this year. We will only have to start thinking about other options if things continue to deteriorate after that.
'So Much Is in Flux at the Moment'
SPIEGEL: The VW Group was still employing some 16,500 temporary workers at the end of 2008. How many will there be at the end of 2009?
Winterkorn: We will no longer employ any temporary workers. This isn't good news for those affected. But there is no way around it.
SPIEGEL: Will you now stop the construction of a new plant in the United States, where VW plans to build more than 150,000 additional cars?
Winterkorn: No, why should we? I assume that by 2011, when the plant goes online, the United States will have overcome its problems. And then the new model that will be built there will be just the right thing: a car that offers plenty of room and yet is very fuel-efficient.
SPIEGEL: Wouldn't that jeopardize the future of the Emden plant, where the Passat is produced for export to the United States?
Winterkorn: Not at all. The Passat will still be sold in the United States, as will the Jetta and the Golf. We just want to increase our sale in the US with the new model. Our goal for 2018 remains in effect, that is, to be selling 850,000 cars in the US market.
SPIEGEL: You assume that the crisis will have been overcome in two years and that worldwide automobile sales will continue to grow. But growth until now has been based on a credit bubble. Doesn't the industry have to adjust to the fact that future growth will be minimal at best?
Winterkorn: In China, for example, growth will not progress as steeply as expected, at least not initially. But it will happen eventually. Europe and the United States are weak at the moment. But the US will always be an enormous automobile market. You're lost without a car there. Or take Russia: It is a market with three million cars today, but it will eventually be one with five to six million.
SPIEGEL: And Russia has now been hard-hit by the crisis…
Winterkorn: …I know, I know, but don't be so pessimistic! A lot of things were paid for with credit in Russia. Borrowers are now paying 20 to 25 percent interest on those loans. It is clear that there are problems. But Russia has the largest reserves of natural resources, including iron and natural gas. The market will develop in the long term, and the VW Group will benefit from it.
SPIEGEL: With all due respect for your optimism, does VW have the right cars for the future? You have bet on luxury, Bugatti, Bentley and Lamborghini, on 12-cylinder engines. But now affordable and environmentally responsible cars are in demand.
Winterkorn: We proudly unveiled a three-liter Lupo 10 years ago. A few journalists showed up when we unveiled the new model. But 10 years later, when we unveiled a Bugatti model, the photographers practically trampled each other to death. And customers weren't exactly beating down our doors for those three-liter cars. The time is probably ripe for those kinds of cars today. We will unveil a new Polo that consumes 3.5 liters (per 100 km, or 68 mpg) at the Geneva Motor Show.
SPIEGEL: But aren't these just alibi cars, so that you can pursue your true passion and be able to build sports cars like the Audi R8?
Winterkorn: We do both, and I'm proud of that. There are customers who buy sports models and those who buy fuel-efficient cars. This is precisely the strength of a multi-brand group.
SPIEGEL: But the crisis has changed attitudes toward the car for many people. It is seen less as a status symbol and more as a means of transportation. Do you have to revise your model policy?
Winterkorn: We have to shift our emphasis a little. Smaller engines are in demand. One could imagine, for example, an Audi A8 with a four-cylinder diesel engine that consumes only a little more than five liters (47 mpg). That would have been inconceivable a few years ago. But, on the other hand, we will not allow the Lamborghini or Bentley product lines to die for this reason.
SPIEGEL: But their most important customers are gone, for now: the investment bankers, who used to use their bonuses to buy a Bentley or a Lamborghini.
Winterkorn: Yes, and that's why we are selling fewer of those cars, for now. But we have to ask ourselves what a car like this should look like in the future. Perhaps a Bentley has to get an aluminum body, making it 300 to 400 kilos lighter. Or a carbon fiber body for a Lamborghini. In any case, we will continue to develop these brands.
SPIEGEL: The future of another corporate brand is in jeopardy. SEAT sells cars mainly in southern Europe, and these markets are falling away. How long can the VW Group afford losses at SEAT?
Winterkorn: The Spanish car market has been cut almost in half. Instead of 1.6 million, only 800,000 cars are being sold there now. Of course, this has a very strong effect in SEAT, with its 10-percent share of the market. For now, the company is introducing two new models, and we hope that this will stabilize the brand.
SPIEGEL: Has Wendelin Wiedeking, the CEO of Porsche, the majority shareholder in VW, said how he envisions crisis management at VW?
Winterkorn: I believe that Mr. Wiedeking has no need to be concerned about his investment, given the way we approach the crisis. Porsche's investment in VW was certainly the best thing that could have happened, for everyone involved.
SPIEGEL: Would Porsche have stood a chance of surviving the crisis on its own?
Winterkorn: Porsche clearly benefits now from its ability to use technologies from the VW Group. And the benefit to us is that we have two stable major shareholders, Porsche and the state of Lower Saxony.
SPIEGEL: Other carmakers, like Daimler, would be happy to have a major shareholder. Do you think that Daimler can survive the crisis on its own, or will it have to join forces with BMW?
Winterkorn: A crisis is often the reason for two once-hostile companies to launch into a joint venture. But it's difficult even then. Audi has been part of the VW Group for the past 40 years. But the real cooperation did not begin until 1993, when Ferdinand Piëch became chief executive. There has to be someone who decides which technology will be used. Otherwise everyone will want to develop his own engine and will take every opportunity to undermine cooperation.
SPIEGEL: Can you predict which independent automakers will still be around in three years?
Winterkorn: There will be two Americans, one or two Japanese, one French company, and perhaps one large Chinese company. Daimler and BMW will exist. But so much is in flux at the moment that predictions are very difficult.
SPIEGEL: You didn't mention VW. Are you pessimistic about the group?
Winterkorn: On the contrary: I see us as solid. Of course, the crisis is not just passing us by without affecting us. However, we are in a good position, and we will certainly emerge stronger from the crisis.
SPIEGEL: Mr. Winterkorn, thank you for this conversation.
Interview conducted by Dietmar Hawranek and Armin Mahler
URL:
www.spiegel.de/international/business/0,1518,610832,00.html
As additional, please to click above url for remainder of interview
Karl
The life blood of Germany, is manufacturing, with the subseqent produced product, be exported to purchasing customers.
With this, is of simular, exporting facturies for foreign located production of German products for local consumption. In as such, the spin off is, work position opportunty for the people in that regin. As of this, a win win situation is gained by all.
But, as very well known, one of the industries struck very hard, is the auto industry as very well exampled not only in Europe, but that also in North America.
The following is an interview with VW CEO for his inpute and analysis as an expert.
SPIEGEL ONLINE
03/02/2009 04:32 PMINTERVIEW WITH VOLKSWAGEN CEO
MARTIN WINTERKORN
The Auto Industry Crisis 'Is Truly Brutal'
Volkswagen CEO Martin Winterkorn speaks with SPIEGEL about government bailouts for competitors, the worldwide slump in demand for cars and VW's chances of surviving natural selection in the auto industry.
SPIEGEL: Mr. Winterkorn, should the (German) government rescue Opel?
Martin Winterkorn: The government should stay out of it. It is legitimate for the government to come to a company's aid with isolated loan guarantees, but this should only apply for a transitional period. The government cannot become a bailout organization for companies on the verge of bankruptcy.
SPIEGEL: Is Opel on the verge of bankruptcy?
Winterkorn: I cannot be a judge of that, but it would, of course, be regrettable. All I know is this: The bailout of General Motors is not easy, given the intricate web of relationships that has grown over the years. Imagine if we wanted to spin off Audi today. I don't know how Audi could survive if the VW Group were to stop supplying this subsidiary, be it with parts, technology or expertise.
SPIEGEL: General Motors and Chrysler are almost broke. Fiat's chairman has said that the company cannot survive on its own. Saab has instituted bankruptcy proceedings. Is an elimination contest taking place in the auto industry today?
Winterkorn: It looks that way. I have just returned from China, where there are still about 200 different automobile makers. A weeding-out process is also take place there.
SPIEGEL: Aren't you at least somewhat pleased by the threat of your competitors' demise, because it makes the business easier for the VW Group?
Winterkorn: Of course, if one player disappears from the field, the others will see their opportunities improve. But no one escapes this sort of crisis unscathed. It starts with the discounts with which faltering manufacturers hope to revive their sales. In doing so, they bring down prices across the board. And then there are the suppliers. If one automaker fails, Bosch, Mahle, Conti and other suppliers have a problem. Their plants no longer operated at capacity, and it becomes more difficult for VW to negotiate attractive purchasing prices. It isn't fun for anyone.
SPIEGEL: A number of governments plan to rescue the auto industry in their countries with billions in rescue funds. The United States is bailing out General Motors and Chrysler. France is helping Renault, Peugeot and Citroën. Will the companies surviving in the end be the ones that get the most support, and not necessarily the healthiest ones?
Winterkorn: That could happen, which is why I take a very critical view of such government assistance programs. They're a step back to a distance past. Who are we, after all? We are in Europe, and we have the EU. Under these circumstances, France cannot massively support its industry and at the same time require the automakers to close their plants in Eastern Europe, if any have to be closed.
SPIEGEL: The German government also wants to help the auto industry. It has already earmarked €1.5 billion ($1.88 billion) for scrapping bonuses. Doesn't this chiefly promote the purchase of small Italian and French cars?
Winterkorn: We also benefit from it, and that's why such programs are okay. They do not exclusively help the companies in one country. It is important to ensure that we too will experience a significant boost as a result. And that is the case. Normally, about 2,000 people a day order a Volkswagen in Germany. That number jumped to more than 6,000 in February. Dealerships have been staying open until 10 p.m. on Saturdays. Based on order volume, this will be the best February in many years.
SPIEGEL: But doesn't the scrapping bonus mainly improve sales of the Polo, which is made in Spain?
Winterkorn: No. Sales of the Golf, the Touran and the Passat are also up. And how many parts for the Polo do you think are made in Germany? The engine, transmission, parts of the chassis, the steering system, sheet metal parts and steel -- a total of 60 percent. That's why the scrapping bonus is clearly having a positive impact on employment. But I do not believe that the amount of money budgeted for the plan is enough. The program should definitely be extended. Besides, the government takes in as much money in sales tax revenues as it spent on the bonuses.
SPIEGEL: If the scrapping bonus is really working, that is, if your order volume is up so significantly in February, why did VW reduce working hours for its employees?
Winterkorn: We are seeing this positive development in Germany, and it's important also to talk about that in the crisis. But the negative tendencies are, of course, the dominant ones. In January, car sales declined by 37 in the United States, by 28 percent in Europe, by 20 percent in Japan, and so on. Things are in decline everywhere. That's what makes this crisis so dangerous. It is truly brutal.
SPIEGEL: You have worked in the auto industry for almost three decades. Have you ever experienced a crisis like this one?
Winterkorn: None of us has ever experienced such a tailspin. There has been excess capacity in the industry for a long time. We were able to handle it, but then came the financial crisis. Even healthy companies are having trouble getting credit from the banks. This creates an explosive mix, and no one is quite sure what else we can expect.
SPIEGEL: Governments worldwide have had to nationalize banks to save them. Some countries even face the threat of national bankruptcy. Do you believe that the political world has responded appropriately to these challenges?
Winterkorn: The grand coalition in Berlin certainly has. Chancellor Angela Merkel, Finance Minister Peer Steinbrück and the junior ministers have acted very prudently so far. And if we manage to overcome this crisis with common sense and not too much new debt, things will eventually turn around. But I am not ruling out the possibility that things could get drastically worse first. Imagine this continuing for another two or three years. Then we won't just be talking about reduced working hours.
SPIEGEL: Does VW have to lay off workers and close plants? Productivity rises by 5 to 10 percent each year. If you want to secure the 329,000 jobs within the VW Group, sales will have to grow substantially. But now sales are even shrinking.
Winterkorn: At this point, no one in our company is considering layoffs or the like. By reducing working hours, we can ensure that no cars are being produced for warehouse inventory. Besides, we have a 35-hour workweek, which we can reduce to 28 hours. This allows us to cut back production and yet hold on to our core workforce. I don't anticipate any problems in this regard for this year. We will only have to start thinking about other options if things continue to deteriorate after that.
'So Much Is in Flux at the Moment'
SPIEGEL: The VW Group was still employing some 16,500 temporary workers at the end of 2008. How many will there be at the end of 2009?
Winterkorn: We will no longer employ any temporary workers. This isn't good news for those affected. But there is no way around it.
SPIEGEL: Will you now stop the construction of a new plant in the United States, where VW plans to build more than 150,000 additional cars?
Winterkorn: No, why should we? I assume that by 2011, when the plant goes online, the United States will have overcome its problems. And then the new model that will be built there will be just the right thing: a car that offers plenty of room and yet is very fuel-efficient.
SPIEGEL: Wouldn't that jeopardize the future of the Emden plant, where the Passat is produced for export to the United States?
Winterkorn: Not at all. The Passat will still be sold in the United States, as will the Jetta and the Golf. We just want to increase our sale in the US with the new model. Our goal for 2018 remains in effect, that is, to be selling 850,000 cars in the US market.
SPIEGEL: You assume that the crisis will have been overcome in two years and that worldwide automobile sales will continue to grow. But growth until now has been based on a credit bubble. Doesn't the industry have to adjust to the fact that future growth will be minimal at best?
Winterkorn: In China, for example, growth will not progress as steeply as expected, at least not initially. But it will happen eventually. Europe and the United States are weak at the moment. But the US will always be an enormous automobile market. You're lost without a car there. Or take Russia: It is a market with three million cars today, but it will eventually be one with five to six million.
SPIEGEL: And Russia has now been hard-hit by the crisis…
Winterkorn: …I know, I know, but don't be so pessimistic! A lot of things were paid for with credit in Russia. Borrowers are now paying 20 to 25 percent interest on those loans. It is clear that there are problems. But Russia has the largest reserves of natural resources, including iron and natural gas. The market will develop in the long term, and the VW Group will benefit from it.
SPIEGEL: With all due respect for your optimism, does VW have the right cars for the future? You have bet on luxury, Bugatti, Bentley and Lamborghini, on 12-cylinder engines. But now affordable and environmentally responsible cars are in demand.
Winterkorn: We proudly unveiled a three-liter Lupo 10 years ago. A few journalists showed up when we unveiled the new model. But 10 years later, when we unveiled a Bugatti model, the photographers practically trampled each other to death. And customers weren't exactly beating down our doors for those three-liter cars. The time is probably ripe for those kinds of cars today. We will unveil a new Polo that consumes 3.5 liters (per 100 km, or 68 mpg) at the Geneva Motor Show.
SPIEGEL: But aren't these just alibi cars, so that you can pursue your true passion and be able to build sports cars like the Audi R8?
Winterkorn: We do both, and I'm proud of that. There are customers who buy sports models and those who buy fuel-efficient cars. This is precisely the strength of a multi-brand group.
SPIEGEL: But the crisis has changed attitudes toward the car for many people. It is seen less as a status symbol and more as a means of transportation. Do you have to revise your model policy?
Winterkorn: We have to shift our emphasis a little. Smaller engines are in demand. One could imagine, for example, an Audi A8 with a four-cylinder diesel engine that consumes only a little more than five liters (47 mpg). That would have been inconceivable a few years ago. But, on the other hand, we will not allow the Lamborghini or Bentley product lines to die for this reason.
SPIEGEL: But their most important customers are gone, for now: the investment bankers, who used to use their bonuses to buy a Bentley or a Lamborghini.
Winterkorn: Yes, and that's why we are selling fewer of those cars, for now. But we have to ask ourselves what a car like this should look like in the future. Perhaps a Bentley has to get an aluminum body, making it 300 to 400 kilos lighter. Or a carbon fiber body for a Lamborghini. In any case, we will continue to develop these brands.
SPIEGEL: The future of another corporate brand is in jeopardy. SEAT sells cars mainly in southern Europe, and these markets are falling away. How long can the VW Group afford losses at SEAT?
Winterkorn: The Spanish car market has been cut almost in half. Instead of 1.6 million, only 800,000 cars are being sold there now. Of course, this has a very strong effect in SEAT, with its 10-percent share of the market. For now, the company is introducing two new models, and we hope that this will stabilize the brand.
SPIEGEL: Has Wendelin Wiedeking, the CEO of Porsche, the majority shareholder in VW, said how he envisions crisis management at VW?
Winterkorn: I believe that Mr. Wiedeking has no need to be concerned about his investment, given the way we approach the crisis. Porsche's investment in VW was certainly the best thing that could have happened, for everyone involved.
SPIEGEL: Would Porsche have stood a chance of surviving the crisis on its own?
Winterkorn: Porsche clearly benefits now from its ability to use technologies from the VW Group. And the benefit to us is that we have two stable major shareholders, Porsche and the state of Lower Saxony.
SPIEGEL: Other carmakers, like Daimler, would be happy to have a major shareholder. Do you think that Daimler can survive the crisis on its own, or will it have to join forces with BMW?
Winterkorn: A crisis is often the reason for two once-hostile companies to launch into a joint venture. But it's difficult even then. Audi has been part of the VW Group for the past 40 years. But the real cooperation did not begin until 1993, when Ferdinand Piëch became chief executive. There has to be someone who decides which technology will be used. Otherwise everyone will want to develop his own engine and will take every opportunity to undermine cooperation.
SPIEGEL: Can you predict which independent automakers will still be around in three years?
Winterkorn: There will be two Americans, one or two Japanese, one French company, and perhaps one large Chinese company. Daimler and BMW will exist. But so much is in flux at the moment that predictions are very difficult.
SPIEGEL: You didn't mention VW. Are you pessimistic about the group?
Winterkorn: On the contrary: I see us as solid. Of course, the crisis is not just passing us by without affecting us. However, we are in a good position, and we will certainly emerge stronger from the crisis.
SPIEGEL: Mr. Winterkorn, thank you for this conversation.
Interview conducted by Dietmar Hawranek and Armin Mahler
URL:
www.spiegel.de/international/business/0,1518,610832,00.html
As additional, please to click above url for remainder of interview
Karl
For of the rapidity of message passage on the board it is a challenge...