Even rank & file workers of the company will suffer as a result of VW’s emissions scandals. Cutting these jobs will help VW to pay the huge penalties that the company is required to hand over to various governments, but VW is trying to save face by claiming that this is an attempt to become as efficient as…let’s say…Toyota.
lower demand due to lower sales means less production which means fewer workers. Which means less income/profit which frees up money to pay settlements? Huh?
While I don’t agree with what they did faced with increasingly difficult emissions requirements and competition, businesses have to do what they have to do to cut costs. Labor is an elastic expense plus related to production costs, plus can provide an immediate savings to generate cash. Never been there? Please tell how you would generate cash then? So if cutting labor costs is not smart when you need to save money, then you’d save money by hiring more people? Right, makes little sense. Regardless of how big they are, there is generally not an endless pile of cash just sitting there to redistribute to customer/victims and the government.
Remove the word “even” and I’ll agree 100%.
Executives have contracts with “golden parachutes”. I once was the recipient of a small one, perhaps better described as an “aluminum parachute”, but it helped.
Good point, MB!
That is 5% of the approximately 610,000 VW employees. Not a huge amount in that light, but still a sad state due to what appears to be criminal action by quite a few members of management.
I seem to recall a saying about something rolling downhill
I would use the proper emoji, but I think we all know what is being referred to
To paraphrase an old saying:
When the execs at the top catch a cold the workers at the bottom catch the flu.
Similarly, the Trickle Down theory of economics is best illustrated when a horse urinates, and the sparrows on the ground get wet.
The peons’ “benefits” under the Trickle Down theory of economics are not very different from what happens to those sparrows.
The saying at work is- stuff rolls downhill and we’re standing in the ditch…
The talk among the auto press and the PR folks at automakers is that the auto industry has hit peak sales and is going to dip in 2017/2018. VW’s intentional illegal polluting may be less related to this “reduction” than we think. Interesting fact about VW America: Total sales are less than just the Camrys Toyota builds in the U.S.
same . . .
One way marketers judge a retail business is the “walk by”, comparing how many customers are going into and out of that store compared to other stores nearby. They’ll sometimes also take note of what % of the customers coming out are carrying something they bought.
So what is your “walk-by” impression of the local VW dealerships in your area? I happened by one of San Jose’s auto rows the other day and did seem to notice somewhat fewer customer-looking-folks milling around the VW dealership compared to the others.
It is like any other big corporate. The top guy is axed (at least figuratively) which means he/she gets a massive severance package (think of it as early retirement) and then a few poor employees are shown the door, most if not all of whom did not have anything to do with any scandals. I am not surprised.
A flip side to the argument; VW was able to employ those 30,000 employees because they were selling those “cheating” diesels. Sales slowdowns will always affect the bottom rung of the employment ladder more than the top guys.
Seems like an incentive become one of the top guys instead of staying the employee at the bottom, don’t you think?
I should become a top dog, because then I’ll get rewarded for my cheating ways
nice guys finish last
That’s a false analogy. There’s no way of knowing if they could have made the diesels without cheating and sell the same amount or bear the same amount. Your conclusion is flawed based on the information at hand.
Well we know the software “fix” decreases mileage and performance for VW EU diesels and that fix may not be applicable to the US models. We also know that diesels that meet US emissions from BMW and Mercedes use expensive urea injection technology to comply that VW did not use. Given those facts, IF the VW diesels had met US and EU emissions, they would have cost more and/or lost performance or both. That is a competitive disadvantage and would have lost some of the 9.7 million VW sales.
Again unproven conclusion based on nothing but conjecture.
Pretty much a fact that the cheating VWs didn’t meet specs, and that all competing brands had to use more expensive technology. Also, VW hasn’t been able to come up with a fix yet. Facts point to VW’s inability to build those diesels at that cost that meet the regs and provide the mpgs.