The 'Sick Man' of Europe marches steadily along.
Underrated that Germany has gotten, essentially, every major decision of the 21st century wrong.
— Hunter📈🌈📊 (@StatisticUrban) November 28, 2024
Reliance on Russian energy. Significant underinvestment in infrastructure. Refusal to deficit spend. Belief that China wouldn't leverage their "partnership" to develop its own… https://t.co/xIC5ebXWXX pic.twitter.com/j1kMTX6Syi
And Volkswagen is the symptom of the week.
Back in September, after the disastrous regional election results (especially for the Green party), word came that VW was, for the first time in its history, considering shutting down plants.
...Word was also breaking this morning concerning more Green deleterious effects on the German economy, which vindicates every single populist vote. For the first time since they were founded 87 years ago, Volkswagen is shutting down German factories.
This is a seismic psychological blow outside of the economics of the moment.
Volkswagen AG is considering unprecedented factory closures in Germany in a bid for deeper cutbacks, delivering another blow to Chancellor Olaf Scholz’s government.
...Any shutdowns would mark the first closures in Germany during the company’s 87-year history, setting VW up for a clash with powerful unions.
I'm not sure that the CEO Oliver Blume has the answer to what ails them, but he seems honest about some of the issues causing the current difficulties.
In an interview with German newspaper Bild last month, Volkswagen CEO Oliver Blume was painfully honest about the automaker's delicate situation. He blamed "decades-long structural problems" for the lack of competitiveness, citing high labor costs as one of the main culprits. Massive layoffs, pay cuts, and even plant closures are looming to optimize the business, but VW is also looking to cut costs in other areas.
The mandated shift to electric vehicles hasn't worked out for VW, either appeal or price-wise, for consumers, and their market share has plummeted precipitously.
Among those threats is China, whose domestic car industry, fueled by electric vehicles, has proven to be a massive challenge for Europe’s automakers.
While Volkswagen invested heavily in EVs, sales have remained far behind those of market leaders such as BYD and Tesla.
The result has been a loss of market share in the world’s biggest car market. Global sales for European auto brands, including VW and Stellantis, are down roughly 20% from pre-pandemic averages, according to Just Auto.
Responding to the company's crisis, both management and employees are taking a page out of what I'd call the European playbook - both are completely ignoring the circumstances that brought them to this point and refusing to address those issues first.
Instead, they're doing the industrial version of Democrats losing to Trump on November 6 - doubling down on what got them their asses handed to them to begin with.
As far as labor costs go and having to shut plants down because no one wants their lackluster end product, German workers are throwing temper tantrums.
"Warning strikes," they call them. The walkouts are designed to pressure management.
Workers at nine Volkswagen Group car and component plants across Germany were going on strike for several hours on Dec. 2, bringing assembly lines to a halt as labor and management clash over the future of the carmaker’s German operations.
The so-called warning strikes — temporary walkouts designed to pressure management during deadlocked negotiations — were taking place at all but one of VW’s German plants, starting with the company’s flagship electric-vehicle factory in Zwickau.
At VW’s main plant in Wolfsburg, employees left their stations to attend a rally where works council chief Daniela Cavallo blasted management for refusing to back away from the threat of factory closures and for not supporting cuts in dividend payments as part of the savings plan.
“This warning strike is taking place to underline our legitimate demands,” Cavallo told workers gathered in front of the high-rise building housing VW executive offices. “The board should know that the crisis at VW can only be resolved alongside the workforce, and not against them.”
On the corporate side, Blume and his brain trust want to get new models into development sooner.
They're saving money by canxing plans for a factory that would have been able to build a complete car in ten hours (I mean, does anyone really want that?), but saving time on the front side by cutting back on real-life vehicle testing and doing more simulations or 'virtual' testing.
As crappy as the general perception of VW's quality control is already, does anyone think knowing a model wasn't wrung out in real life is going to help build brand confidence?
"Trust us - quality won't take a hit" is not the winning line they might think it is.
...Speeding up development is facilitated by doing fewer real-world tests. VW built 40% fewer prototypes in 2024. By now, you're probably (and rightfully) concerned that quality has consequently taken a hit, but Grünitz says that's not actually the case. The Wolfsburg-based automaker is doing more bench and virtual testing to compensate for a reduction in the number of physical test vehicles.
"We can now run the entire development chain with a digital prototype, shortening the product development process and reducing costs without sacrificing testing depth."
...VW has already axed plans to build a €2 billion factory that would enable a car to be built in only 10 hours. Even so, the new objective is to "radically cut manufacturing times" at existing plants by installing new and more advanced tools. Working closer with suppliers will also bolster efficiency.
Yeah, I know - I'm a Luddite. But I like balance, which means maintaining a certain amount of hands and eyeballs in a process.
Nothing about VW's bottom line regarding production costs in so far as utilities or labor is going to change until the country addresses what they've done to the infrastructure. That is an immutable obstacle with only one correct answer - move away from NetZero.
VW is looking outside Europe for helping hands to get over this latest hump.
Looks like American EV manufacturer Rivian's flush with cash and willing to share some cha-ching.
More has come to light about the $5.8 billion partnership between Rivian and Volkswagen Group as well as what it will actually lead to. Yes, EVs, but more specifically, Audi and Porsche will utilize Rivian’s EV architecture and software as early as 2027. VW’s flagship EV—dubbed “Project Trinity”—has a clear path too.
But first, Rivian will help with the electric ninth-gen Golf.
ore has come to light about the $5.8 billion partnership between Rivian and Volkswagen Group as well as what it will actually lead to. Yes, EVs, but more specifically, Audi and Porsche will utilize Rivian’s EV architecture and software as early as 2027. VW’s flagship EV—dubbed “Project Trinity”—has a clear path too.
But first, Rivian will help with the electric ninth-gen Golf.
Now, call me a cynical curmudgeon - okay, you already do, but go ahead again anyway - as I rain on VW's parade, but this deal between the two automakers kind of pisses me off.
Why? See, here I thought Rivian was having difficulties like most of the US EV segment and then...OOH.
WTF is this…
— John LeFevre (@JohnLeFevre) November 26, 2024
Rivian loses $40k for every vehicle it sells.
And Biden just gave them $6,600,000,000. pic.twitter.com/vnYtwCOwu7
So now I feel like you and I are paying not only to bail Rivian out, infuriating me to no end, but, by extension, we're also giving a sinking foreign automaker our hard-earned dollars?
All to keep the UAW happy on top of it? Buying off a UNION?
VURT DA FURK?
Shares of a struggling electric-car maker that competes against Tesla are surging this week after the lame-duck Biden administration loaned the company billions of dollars.
The Department of Energy announced on Tuesday that it was extending a $6.6 billion loan to Rivian for the construction of a $5 billion electric car factory in Georgia that the company initially started but then put on hold due to financial constraints.
Shares of Rivian, an EV startup based in California that has been looking to challenge Tesla — whose CEO Elon Musk has been front and center in boosting President-elect Donald Trump — climbed 15% after news of the loan was announced early Tuesday.
The stock is up 22% this week. On Wednesday, the shares recently changed hands at $12.20, up 5.6%.
The Rivian loan, which is reportedly contingent on the company not actively opposing union organizing efforts at the facility, would enable the company to complete construction of the Atlanta-area plant, which has the support of Georgia’s Republican Gov. Brian Kemp.
They didn't have the money for the plant because they lose almost forty grand a vehicle - lose with an "L."
POTATUS basically buys the UAW a car plant, so now Rivian has freed up money to spend in Europe, all on a tax-payer funded SIXPOINTSIXBILLIONWITHAB DOLLAH "loan" that dollars to donuts they default on within two years.
This is right near me, and it's a boondoggle. This picture was take from the air by me of the site. It's been in construction for three years and this is what they have done. Basically leveled & drained. Total waste of $6.5 billion taxpayer dollars.https://t.co/AesqBZniM1 pic.twitter.com/cvDaNUG0xZ
— Flying Monkey 🐒 (@CTFlyMonkey) November 26, 2024
VURT DA ACTUAL FURK?
Rivian is being sued for defrauding investors. One of the biggest investors was Soros, who lost nearly $2 billion in just under a year on Rivian.
— Parker Thayer (@ParkerThayer) November 26, 2024
Soros was also Biden’s biggest donor, and you can bet this loan $ will go towards the eventual settlement. https://t.co/SoUVYa0LK2
Helping former automotive juggernaut VW out of their self-inflicted Euro-misery is part of the grift.
The clueless, helpless grift that has left the German government flailing and impotent to do anything to forestall an industrial catastrophe.
...As Volkswagen threatens to shutter German plants for the first time in the company’s 87-year history, politicians who have for decades protected workers from mass layoffs are struggling to come up with answers amid rising labor frustration and the threat of massive strikes.
...The challenges come at a time when Germany’s government is unable to act following the collapse of the three-party ruling coalition earlier this month. It could be several months before Germany has a new government, as negotiations between the parties could drag on well after the Feb. 23 election. Even then, the country’s constitutional debt brake, which restricts spending, is likely to limit the new coalition’s firepower.
The problem with watching European climate cultists crash their economies is we're finding out we all get to play, whether we want to or not.
Shoot - they never even told us we had the ball.
January 20th can't come a minute too soon.
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