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VW has long suffered from very low levels of productivity. According to Bloomberg, they employ as many people as Toyota and GM combined while making half as man

VW has long suffered from very low levels of productivity. According to Bloomberg, they employ as many people as Toyota and GM combined while making half as many cars as the combined entity. https://www.bloomberg.com/gadfly/articles/2016-11-18/vw-job-cuts-sound-big-but-do-little-to-boost-efficiency https://www.bloomberg.com/gadfly/articles/2016-11-18/vw-job-... Part of the problem are the unions and a large ownership stake by the state, which is naturally not very interested in having their constituent lose their jobs.

jobu 10y ago
> Part of the problem are the unions and a large ownership stake by the state That's interesting. I thought VW had been fully privatized, but TIL the German state of Lower Saxony still owns 20% of the company - http://www.volkswagenag.com/content/vwcorp/content/en/investor_relations/share/Shareholder_Structure.html http://www.volkswagenag.com/content/vwcorp/content/en/invest...
- germanier 10y ago
  Usually a shareholder needs to own more than 25% of the shares to veto major decisions. For Volkswagen there is a special law lowering this requirement to 20%, which conveniently is the number of shares the state of Lower Saxony owns. This law also requires a two-third majority in the board of directors (which is distinct from the executive board) to set-up or close down factories. Half of the members in the board of directors are (as in all large German companies) employee representatives, granting them a veto power for those decisions.
  - Pica_soO 10y ago
    This description sounds quite communistic i guess.. But it works really well for everybody.. Some restructuring is necessary though- the whole affair is prone to dig into a technology-tree-branch and stay stuck there.
wahern 10y ago
Or maybe there's no problem at all and the Bloomberg reporter doesn't know what he's talking about? Some quick Googling suggests that Toyota outsources up to 70% of their parts. (http://artoflean.com/index.php/2014/01/07/444/ http://artoflean.com/index.php/2014/01/07/444/) VW is much more vertically integrated. (http://www.autoblog.com/2012/12/06/how-volkswagen-is-run-like-no-other-car-company/ http://www.autoblog.com/2012/12/06/how-volkswagen-is-run-lik...) "How can this be possible? How can VW look so uncompetitive from a productivity standpoint, yet out-earn all of its competitors? "Ah, that's the magic of VW's corporate structure."

jobu 10y ago

> Part of the problem are the unions and a large ownership stake by the state That's interesting. I thought VW had been fully privatized, but TIL the German state of Lower Saxony still owns 20% of the company - http://www.volkswagenag.com/content/vwcorp/content/en/investor_relations/share/Shareholder_Structure.html http://www.volkswagenag.com/content/vwcorp/content/en/invest...

germanier 10y ago
Usually a shareholder needs to own more than 25% of the shares to veto major decisions. For Volkswagen there is a special law lowering this requirement to 20%, which conveniently is the number of shares the state of Lower Saxony owns. This law also requires a two-third majority in the board of directors (which is distinct from the executive board) to set-up or close down factories. Half of the members in the board of directors are (as in all large German companies) employee representatives, granting them a veto power for those decisions.
- Pica_soO 10y ago
  This description sounds quite communistic i guess.. But it works really well for everybody.. Some restructuring is necessary though- the whole affair is prone to dig into a technology-tree-branch and stay stuck there.

wahern 10y ago

Or maybe there's no problem at all and the Bloomberg reporter doesn't know what he's talking about? Some quick Googling suggests that Toyota outsources up to 70% of their parts. (http://artoflean.com/index.php/2014/01/07/444/ http://artoflean.com/index.php/2014/01/07/444/) VW is much more vertically integrated. (http://www.autoblog.com/2012/12/06/how-volkswagen-is-run-like-no-other-car-company/ http://www.autoblog.com/2012/12/06/how-volkswagen-is-run-lik...) "How can this be possible? How can VW look so uncompetitive from a productivity standpoint, yet out-earn all of its competitors? "Ah, that's the magic of VW's corporate structure."