Not so many years ago, the chairman of VW blithely told reporters in Germany that his plan to counteract the firm's declining profitability involved selling about 35 percent more vehicles in North America, like it was that simple.
Maybe because Bernd Pischetsrieder didn't take the time to share this strategy with the North American media, few American and Canadian consumers found out what was required of them and instead started to turn their backs on the aging products, most of which are built in Mexico.
This is why VW Canada has a senior manager at the helm again after many years of U.S. rule, and why he talks openly about how he hopes the Canadian operation will survive the coming "shakeout" in this country's car companies.
As it turns out, the company may get some help in the wake of the kind of scandal that would be widely seen as a crisis if it happened in Canada or the U.S.
But the resignations of two of the company's most powerful executives, including personnel chief Peter Hartz and works council chief Klaus Volkert, are being seen as an opportunity to take big steps to improve the company's operating systems.
The details of the situation are entertainingly lurid, involving allegations of all kinds, including the use of company money to pay for luxury holidays and prostitutes enjoyed by the labor leaders to persuade them to support proposed management changes to the way VW operates, all of which the company is said to have done its best not to notice.
Because of a Germany policy generally called "co-determination" (or "Mitbestimmung" in German) the workers have considerable say in what the company does. The theory is that they have just as big a stake in a firm's future as the shareholders do, so they should have a say in how it operates. This makes it particularly hard for a company to take hard or even unpopular decisions on things like layoffs or plant closings or even overtime, and many business leaders complain about it, though quietly.
But now there's considerable agitation from many places in Germany to make the government rethink the policy and break up the "cozy management-union ties," since it involves more than just VW or even the car industry. There are people who say co-determination is the principle management problem in Germany today, and just as many who say it's the best thing that ever happened for worker rights.
The big knock against VW is that its system went beyond co-determination to co-management, and that is what Pischetsrieder now has a chance to do away with.
It's widely felt that VW has to take some big changes if it's going to shake the torpor its currently in, particularly with regard to sales and costs.
The company would probably love to close some of its underused European plants, improve its quality and reduce its manufacturing costs, the right-wing theory goes, but is pretty much prevented from doing so by worker opposition.
If VW is to prosper or even carry on in an increasingly global market, it's going to have to decrease its costs dramatically. Right now that means buying steal from China for the cars it builds in Mexico for shipment to Canada and the U.S., but in the years to come it will mean ever bigger steps.
photo:VW of America
Maybe because Bernd Pischetsrieder didn't take the time to share this strategy with the North American media, few American and Canadian consumers found out what was required of them and instead started to turn their backs on the aging products, most of which are built in Mexico.
This is why VW Canada has a senior manager at the helm again after many years of U.S. rule, and why he talks openly about how he hopes the Canadian operation will survive the coming "shakeout" in this country's car companies.
As it turns out, the company may get some help in the wake of the kind of scandal that would be widely seen as a crisis if it happened in Canada or the U.S.
But the resignations of two of the company's most powerful executives, including personnel chief Peter Hartz and works council chief Klaus Volkert, are being seen as an opportunity to take big steps to improve the company's operating systems.
The details of the situation are entertainingly lurid, involving allegations of all kinds, including the use of company money to pay for luxury holidays and prostitutes enjoyed by the labor leaders to persuade them to support proposed management changes to the way VW operates, all of which the company is said to have done its best not to notice.
Because of a Germany policy generally called "co-determination" (or "Mitbestimmung" in German) the workers have considerable say in what the company does. The theory is that they have just as big a stake in a firm's future as the shareholders do, so they should have a say in how it operates. This makes it particularly hard for a company to take hard or even unpopular decisions on things like layoffs or plant closings or even overtime, and many business leaders complain about it, though quietly.
But now there's considerable agitation from many places in Germany to make the government rethink the policy and break up the "cozy management-union ties," since it involves more than just VW or even the car industry. There are people who say co-determination is the principle management problem in Germany today, and just as many who say it's the best thing that ever happened for worker rights.
The big knock against VW is that its system went beyond co-determination to co-management, and that is what Pischetsrieder now has a chance to do away with.
It's widely felt that VW has to take some big changes if it's going to shake the torpor its currently in, particularly with regard to sales and costs.
The company would probably love to close some of its underused European plants, improve its quality and reduce its manufacturing costs, the right-wing theory goes, but is pretty much prevented from doing so by worker opposition.
If VW is to prosper or even carry on in an increasingly global market, it's going to have to decrease its costs dramatically. Right now that means buying steal from China for the cars it builds in Mexico for shipment to Canada and the U.S., but in the years to come it will mean ever bigger steps.
photo:VW of America