Volkswagen: A Symbol of the Stumbling German Economic Miracle?

Volkswagen is currently not only at the center of German economic developments but also serves as an example of Europe's struggle for industrial relevance. The history of the automotive giant reads like an economic thriller: from its founding under Nazi supervision to its return to German ownership by the British Army, and on to various reform attempts of its extensive domestic factories. Today, Europe's largest car manufacturer faces aggressive competitors from China and the costly transition to electric mobility. Intense discussions over company management have erupted once again, the outcome of which could have a lasting impact on the German economy. Daniela Cavallo, the head of VW's powerful works council, views her confrontation with management as an existential threat to the 296,000 German employees and announces fierce resistance against plant closures. Political reactions were not absent: Chancellor Olaf Scholz emphasized the importance of not settling past management mistakes at the expense of the workforce. This crisis shakes the foundations of the German economic miracle, especially at a time when the nation is facing a recession. The transformation toward electric vehicles and the increasing dependence on the Chinese market force VW to overcome old taboos and drastically cut costs. The latest warning came from Ingo Speich of Deka Investment, who draws parallels to the steel industry: "The automotive industry could become the next problem child in Germany." Thomas Schäfer, CEO of the Volkswagen brand, and CFO Arno Antlitz stress the necessity of competitive costs. The influence of the state of Lower Saxony, which represents the workforce with 20 percent of the voting rights and two seats on the supervisory board, adds to the complexity of the decision-making processes. Nevertheless, many observers maintain that a rethink and adaptation to new market conditions are most urgently needed to create a lasting turnaround.