VW Begins to Crumble, CEO Out

[GSCT]

IMO, a lot of people dont really care about dieselgate because it wasnt a safety issue. Theyre like, "oh, it was just emissions, who cares?"

Volkswagen sales in Canada are tanking this year too. http://www.autofocus.ca/news-events/blogs/volkswagens-canadian-sales-are-beginning-to-crater

 

[IS-SV]

Volkswagen does not have nearly the deep pockets that the top automakers like Toyota have. VW is facing billions in fines and recall-related costs and even before emissions fiasco didn't have the strongest balance sheet. Debt loads are high and rising accordingly.

Yes, VW will have to pay heavily to poach any talent and will likely have to spend borrowed money to do so. So VW can poach talent from top companies, but the best talent looks at more than salaries and bonuses alone when making career changes. What VW may hire is a "hatchet man" and turnaround specialist at some point.

Talented senior executives at competitors are engaged in contracts with lucrative incentives that were designed to encourage retention.

 

[mmcartalk]

Will VWOA poach executives from other companies? They poached one from Toyota awhile ago, and he did get a big raise (he's the COO of Audi USA)...

That makes me wonder if Julie Hamp is unemployed right now and/or looking for another job. Yes, she got herself into some hot water with those tablets in her suitcase (most members here probably remember that incident, so I don't have to re-hash the details). But she was released, cleared of charges, and (presumably?) is free to take up duties in another job. It's easy to criticize people when they are down, but I'm a firm believer in forgiveness and giving people another chance IF they have learned from their mistakes and are not likely to repeat them. Even if someone else within VW is promoted in-house to get the CEO job, that still will leave one or more positions beneath that level open and unfilled.

 

[mikeavelli]

Will VWOA poach executives from other companies? They poached one from Toyota awhile ago, and he did get a big raise (he's the COO of Audi USA)...

Not sure who would want to go there now and not sure if VW can offer the compensation needed to attract top talent...

 

[CIF]

I think the thread title should be edited for accuracy, since the CEO of VW USA is out, not the overall CEO of VW.

Also, shouldn't this thread be somehow merged with the main VW disaster thread?

 

[Bulldog 1]

So then the question becomes....can VW survive this devastating hit to their coffers, their reputation, their loss of talent, their loss of marketshare?
Toyota survived unintended acceleration; General Motors has thus far survived ignition switch deaths; Honda has thus far survived the Takata airbag recall.

 

[mmcartalk]

So then the question becomes....can VW survive this devastating hit to their coffers, their reputation, their loss of talent, their loss of marketshare?
Toyota survived unintended acceleration; General Motors has thus far survived ignition switch deaths; Honda has thus far survived the Takata airbag recall.

The Takata problems affected a number of automakers, not just Honda.

As far as VW surviving, I think it will primarily depend on how much they end up in paying fines....and how much, if any, of those fines are covered by their own liability insurance (liability insurance might not cover deliberate fraudulent actions). But, still, right offhand, I wouldn't bet the farm on them actually folding. They may not be as big as Toyota, but still one of the largest manufacturing corporations in the business, with very deep pockets.

 

[IS-SV]

The Takata problems affected a number of automakers, not just Honda.

And what automaker had a majority of the Takata airbag problems impacting the most vehicles?

 

[mmcartalk]

And what automaker had a majority of the Takata airbag problems impacting the most vehicles?

Here's a complete list. It is too long and detailed to list line-by-line here, so I'll just provide the link.

http://www.safercar.gov/rs/takata/takatalist.html

 

[IS-SV]

As far as VW surviving, I think it will primarily depend on how much they end up in paying fines....and how much, if any, of those fines are covered by their own liability insurance (liability insurance might not cover deliberate fraudulent actions). But, still, right offhand, I wouldn't bet the farm on them actually folding. They may not be as big as Toyota, but still one of the largest manufacturing corporations in the business, with very deep pockets.

I didn't know you had a farm, lol.

Not sure why you bring up liability insurance, when we know the odds of that bailing them out significantly is near zero. Even without admitted fraudulent actions, the insurance policies have (monetary) limits.

You forgot that if bailout is needed, most likely candidate is German government. Survival is most likely, given cozy relationship.

And VW's "very deep pockets" is just vague hearsay (unless talking about execs cargo pants), when they actual recently negotiated with banks to arrange to borrow more money and add to their already high debt load.

 

[IS-SV]

Here's a complete list. It is too long and detailed to list line-by-line here, so I'll just provide the link.

http://www.safercar.gov/rs/takata/takatalist.html

Which is why Bulldog didn't give full list in post no. 26, not relavent to topic here.

 

[Tragic Bronson]

Not sure who would want to go there now and not sure if VW can offer the compensation needed to attract top talent...

Right now, I doubt anyone wants to join the s**tstorm, but if they're seeking a new challenge and pay increase, VW would be able to provide all that should they want in.

Toyota breeds a lot of good talent in-house, though a few will leave given the right situation. Of all the big namers that did besides Del Rosso, only Jim Farley succeed upwardly, but he has always had his family roots at Ford where he will likely work until he retires. Deborah Wahl got to Lexus Marketing from Ford a decade ago, then got hired by Chrysler right before the bankruptcy; but since then, she became the CMO at Mickey D's now, so it turned out well for her even though she left the auto industry. The guy that got hurt the most was Jim Press. Phenomenal sales leader at the Big T for two decades, but once he left for Chrysler like Wahl, things went badly for both sides.

 

[mmcartalk]

I didn't know you had a farm, lol.

Yes, but I'm not currently hiring, so don't send your resume. (j/k) :grinning:

Not sure why you bring up liability insurance, when we know the odds of that bailing them out significantly is near zero. Even without admitted fraudulent actions, the insurance policies have (monetary) limits.

Yes, good point on the policy limits. But, at the same time, I can't imagine a company the size of VW skimping too much on those limits, especially in today's litigious society that is run so much by lawyers. And, of course, policy limits mean little or nothing if the insurance company can also claim (which may apply here) that the suits are a result of criminal action, not liability.

You forgot that if bailout is needed, most likely candidate is German government. Survival is most likely, given cozy relationship.

Again, though, we get back to the question (maybe even a paradox) that has been brought up before: How is the government going to both fine and bail out at the same time? That would basically accomplish nothing.

And VW's "very deep pockets" is just vague hearsay (unless talking about execs cargo pants), when they actual recently negotiated with banks to arrange to borrow more money and add to their already high debt load.

True, VOA (Volkswagen of America) is not that big an organization (primarily because it has been somewhat neglected by VW itself)...but, worldwide, VW is huge, debt load or not.

 

[IS-SV]

Again, though, we get back to the question (maybe even a paradox) that has been brought up before: How is the government going to both fine and bail out at the same time? That would basically accomplish nothing.

.

Again? Who asked that question of little consequence ("again")?... Given the cozy relationship of VW with German government, the fines by German government will be least of VW's problems. The fines/criminal charges, recall costs and court settlements via other nations (including US, Canada, several other European countries, India, Austrailia, Korea, Japan, Canada) in total will likely exceed German fines by factor of 50x-100x.

Again, the most likely bailout contributor if needed is the German government. So VW's survival is largely guaranteed.

Congrats on the new farm, jk.:grinning: Happy Farming with some all terrain tires on the Buick!

 

[Bakemono]

So then the question becomes....can VW survive this devastating hit to their coffers, their reputation, their loss of talent, their loss of marketshare?
Toyota survived unintended acceleration; General Motors has thus far survived ignition switch deaths; Honda has thus far survived the Takata airbag recall.

VW will be fine in the long run. They may not have as deep of pockets as Toyota does but they still have VERY deep pockets and a loyal fanbase who doesnt care about dieselgate. History has proven that for the most part, customers dont remember recalls and recalls dont really hurt sales in the long run. In the near term, it probably will hurt VW a bit. I know that they had planned to buy the Redbull F1 team and get into that but with looming fines, they cancelled those plans.

 

[mmcartalk]

Again? Who asked that question of little consequence ("again")?...

I was referring to the fact that the issue of fines, of course, had been brought up before...but, from what I remembered, not necessarily in conjunction with the idea of government support at the same time. We'll have to wait and see what all of the actual fines will end up being. I suspect that process will go on for quite some time,and involve a number of courts and governments.

 

[IS-SV]

I was referring to the fact that the issue of fines, of course, had been brought up before...but, from what I remembered, not necessarily in conjunction with the idea of government support at the same time..

post #33: "Again, though, we get back to the question (maybe even a paradox) that has been brought up before: How is the government going to both fine and bail out at the same time? That would basically accomplish nothing."

Yes, it seems above "paradox" wasn't mentioned "again" by anybody knowledgeable in conjunction with the idea of German government support.

 

[mikeavelli]

VW will be fine in the long run. They may not have as deep of pockets as Toyota does but they still have VERY deep pockets and a loyal fanbase who doesnt care about dieselgate. History has proven that for the most part, customers dont remember recalls and recalls dont really hurt sales in the long run. In the near term, it probably will hurt VW a bit. I know that they had planned to buy the Redbull F1 team and get into that but with looming fines, they cancelled those plans.

I think though the issue is for VW to achieve their goal of being #1 in sales, they needed huge success in America and that hasn't happened and now I doubt will ever happen. I agree they will be around as they own the European market but you can forget here. They might as well pack it up.

This also is without knowing how much in fines they will be hit with. They are already taking measures to cut costs as they anticipate paying maybe tens of billions.

Its really sad to see Horn go...you are nothing without your dealers and this could be a big nail in the coffin.

 

[mmcartalk]

I agree they will be around as they own the European market but you can forget here. They might as well pack it up.

True, VW is huge in Europe, but so is Fiat and Renault. Because of the fact that Renault has been out of the American market for some 30 years (and never was much even when they were here), and Fiat only recently came back in a limited fashion, many Americans don't realize how big all three companies (including VW) are over there.

 

[mmcartalk]

True, VW is huge in Europe, but so is Fiat and Renault. Because of the fact that Renault has been out of the American market for some 30 years (and never was much even when they were here), and Fiat only recently came back in a limited fashion, many Americans don't realize how big all three companies (including VW) are over there.

My brother, BTW, owned a 1979 Renault 5 (LeCar). It was interesting to drive, but poorly-equipped and mechanically a piece of crap. The driver's seat lasted only a little more than a year with the two of us heavy brothers before its plastic mounts broke right off, and he had to prop it up with a board behind it LOL. (most warranties back then were only 1/12.) I advised him at the time not to buy it, but he liked it.