Will Wolfsburg’s fortunes whittle as VW faces a disaster? – DW – 10/20/2024 | EUROtoday

The very first thing you see when rolling into the German metropolis of Wolfsburg in Lower Saxony by prepare are four large smokestacks rising from an enormous manufacturing unit constructing that carries the VW emblem in blue and white on the entrance of its reddish-brown brick partitions. Welcome to Volkswagen metropolis, house to one of many greatest car-making factories on this planet.

Wolfsburg is one of many few German cities constructed throughout the first half of the twentieth century as a deliberate metropolis, which means it was designed for a goal and constructed on beforehand undeveloped land.

Founded by Hitler’s Nazi regime on 1 July 1938, Wolfsburg was constructed to develop into house for staff producing the the so-called KdF-Wagen — a low-cost, reasonably priced automobile that was constructed till 1945 to please the lots, a part of the Third Reich’s Kraft durch Freude (Strength by Joy) marketing campaign.

Wolfsburg exists due to the Volkswagen (VW) automobile manufacturing unit, and a few say if VW sneezes, Wolfsburg is catching a chilly.

Wolfsburg desires come undone

At the second, VW’s rising disaster is discuss of the city, as Europe’s greatest carmaker is for the primary time in its historical past planning to shut German crops and lay off 1000’s of staff.

More than 60,000 folks work for VW, out of a complete of 120,000 dwelling in Wolfsburg. VW’s wages are above common, making the corporate’s labor prices the best within the automobile trade with about €62 ($67) earned for an hour of labor in 2023.

Kristin Rößer says right here the standard German dream of a home with a backyard, a automobile, and a spouse with two children continues to be alive. The actual property agent is exhibiting DW round a bungalow-style home which, she says, is fairly typical for a lot of VW staff’ houses in Wolfsburg.  A room divider, petrol-colored PVC flooring, and yellow kitchen tiles hark again to the times when many of those houses have been constructed within the Sixties.

Those have been golden days for VW, remembers Rößer, who’s been dwelling in Wolfsburg for all of her life.

These days, nevertheless, she’s feeling large uncertainty gripping town, with not a number of VW staff calling her to “sell their houses before their value collapses,” as she says. Other purchasers had cancelled home-buying contracts even earlier than that they had truly moved in.

“People are hesitating to buy a new house and want to keep their money together until they know what VW will decide,” she says.

In 2023, the 10-brand automobile group nonetheless posted sound income totaling greater than €18 billion, and paid out €4.5 billion in dividends to shareholders. Nevertheless, VW administration launched an effectivity program final yr aimed toward saving €10 billion by 2026 to spice up competitiveness.

In August 2024, nevertheless, administration stated additional financial savings measures have been required, together with the closure of presumably two automobile crops in Germany and steep cuts to the corporate’s 120,000-strong workforce in Germany.

Concerned silence on the gates

On this afternoon in October, the solar is casting a gentle autumn mild on Gate 17 of the sprawling VW web site. Hundreds of staff are flooding by it, after ending their morning shift at 2 p.m. They’re carrying white overalls and sweaters or shirts emblazoned with the VW emblem.

As they head for the massive automobile park exterior the manufacturing unit, their temper appears subdued, and hardly anybody desires to talk to DW and even have their pictures taken by the reporter.

Following large media protection of VW’s troubles in latest weeks, most of them should not within the temper to reply the identical query many times. Of course, staff concern for his or her jobs, says one man, and one other one provides that every one they will do now could be stay assured about the way forward for the carmaker. “We have survived many crises, we will survive this one, too,” he says.

With a median earnings of €5,238, Wolfsburg has one of many richest metropolis populations in Germany, second solely to these dwelling in Ingolstadt, the place carmaker Audi relies.

The instances are altering for Wolfsburg

Business taxes levied on VW’s large income have made Wolfsburg rich, however now town is exhibiting the ever present indicators of financial decline.

The metropolis middle, which is encircled by broad streets with loads of parking areas, is abandoned on this sunny afternoon. Some consumers stroll down Porsche Street, however they’re principally passing by empty store home windows, a number of nickel-and-dime shops and the flickering lights of an occasional playing corridor.

The few cafes and bars alongside the high-street boulevard are additionally not well-frequented as a heat day in October may recommend.

Djuliano Saliovski says that not way back lots of his prospects used to return for dinner as soon as every week, however now they typically solely come as soon as a month.

A refugee from Kosovo, Saliovski and his spouse opened a lodge with restaurant in Wolfsburg a number of years in the past, and they’re common with their prospects, greeting most of them personally by their names.

The COVID-19 pandemic two years in the past had already considerably lowered the variety of dinner and lodge reservations, he says, “but now they are even fewer.” At this time of the yr, he notes, there can be many bookings for Christmas coming in, however not so this yr.

Still, he believes, the scenario will “turn around,” and he is even panning to increase his enterprise in Wolfsburg by shopping for a brand new constructing along with the properties he already owns within the metropolis.

Wolfsburg’s concern of turning into an industrial museum

The superb days of automobile manufacturing in Wolfsburg are on show within the Volkswagen Museum alongside Diesel Street. An enormous lineup of classic vehicles contains all the firm’s hottest fashions, together with the well-known Beetle that was produced greater than one million instances between 1938 and 2003, or the VW minibus referred to as the wagon of selection of the German flower-power technology of the late Sixties.

The museum is a must-see on the itineraries of vacationers, of whom greater than 300,000 are coming to go to Wolfsburg yearly. Apart from that, the so-called Autostadt (auto metropolis) is a degree of attraction — a 28-hectare vehicle theme park providing glimpses into “the world of mobility,” and the place the place extra then three million drivers have been handed the keys to their new VW vehicles to date.

But fewer and fewer vacationers have been coming to go to Wolfsburg, a taxi driver advised DW, noting that a number of years in the past taxi firms may “hardly cope with the demand from tourists and business travelers.”

Could that be an ominous signal that Wolfsburg’s days because the automobile manufacturing capital of Europe are numbered? Is it doable that Volkswagen, the main auto producer by gross sales nonetheless a number of years in the past, is not capable of win over sufficient prospects for its electrical automobiles which are presupposed to be the way forward for the trade?

The Wolfsburg taxi driver has a transparent opinion about Volkswagen and its international management within the combustion-engine period: “Those times are long gone,” he says, including that he thinks the scenario might be “getting even worse.”

Edited by: Uwe Hessler