From bad to worse: Volkswagen in the US
As early as the start of last year, the powerful head of VW’s works council Bernd Osterloh called VW’s US business a "catastrophe." He was talking about poor sales in the US and the company’s Wolfsburg-based management’s inability to respond appropriately to the problem. But he didn’t know how right he was. It took the US Environmental Protection Agency’s investigation to vindicate him.
In 2013, Winterkorn responded firmly and perceptively by replacing the head of VW of America. But then he committed a strategic error. By this time, he had already made the US market his personal management priority. And he’s presented himself as a fastidious, detail-obsessed engineer. The technical world is Winterkorn’s world, and he imagined itself its ruler – as he did the company which doubled its yearly production to 10 million cars under his leadership. Now he has to admit that he’s lost control.
The investigation into the emissions test manipulation has been going for 16 months. That was plenty of time for VW engineers to act. But what did Winterkorn and his men do in the last months? The world’s biggest carmaker – after it recently eclipsed Toyota – concentrated too much on rapid growth. New models were launched on an almost weekly basis, and on top of that, new factories in China and South America were built.
Although he was the head of the VW Group – which comprises 12 car manufacturers - he remained the head of the VW brand for years. He’s only recently handed the reins to former BMW manager Herbert Diess. But it might have been too late.
Meanwhile, the "catastrophe" in the US has only gotten worse. Last month, VW registered a drop in sales. As Winterkorn publicly expresses regret at the emissions test manipulations and announces efforts to win back customers’ trust in the US, he’s misjudging the situation. Even before this latest scandal, US customers had long been choosing cars from Ford, General Motors or Toyota over VW.
What the VW Group now needs is a new leadership structure. The group’s individual brands should each show more responsibility, and less of Martin Winterkorn’s reign. That’s what he should present to the advisory board this week, if he wants to keep his recently extended contract 2018.
Tell us what you think! Leave a message below.