Since 2015, when Volkswagen’s emissions cheating scandal cost it billions of dollars and severely damaged its reputation, the German automaker has taken some major steps to clean house and reform its corporate culture, including several rounds of management shakeups and the resignation of its head of US operations. Late last year, VW revealed that it was making some other changes like speaking English instead of German at management conferences and creating more opportunities for women to advance to leadership roles, in an effort to bring more diversity and international perspective to its leadership.
Shifting cultural paradigms at large, legacy companies is never easy, however, and Volkswagen is no exception. In particular, the company has had a hard time convincing managers of the need to change, CEO Matthias Mueller, who took the helm in the aftermath of “dieselgate,” said on Monday. Reuters reports:
“There are definitely people who are longing for the old centralistic leadership,” Mueller said during a discussion with business representatives late on Monday. “I don’t know whether you can imagine how difficult it is to change the mindset.” Before “dieselgate”, there was an extreme deference to authority at VW and a closed-off corporate culture that some critics say may have been a factor in the cheating.
Last year, we looked at the changes legacy US automakers have been making to their corporate cultures and recruiting practices in an effort to lure talent away from Silicon Valley and into the increasingly high-tech field of automobile design and manufacturing. Bloomberg Tech checks up on what these companies are doing now to entice tech talent, particularly millennials, to choose Detroit over Palo Alto:
What Detroit has going for it is the ability to get innovative cars on the road relatively quickly. That can be appealing for young auto-techies bent on changing the world. Then there’s the cost of living, dirt cheap in Detroit compared with the Valley, along with modern urban lofts sprouting among the gritty downtown streets.
Still, Detroit remains a tough sell, given the Valley’s $1 million signing bonuses and fat equity stakes in promising startups. The car companies’ answer tends to fall in the work-life balance category, with features that have become almost cliches such as treadmill desks and “hoteling” stations for staffers passing through. …
Three state attorneys general are suing Volkswagen over last year’s emissions cheating scandal, the New York Times reports, alleging that top managers at the auto manufacturer were in on the fraud:
The accusations, leveled in lawsuits by New York, Maryland and Massachusetts, contradict Volkswagen’s portrayal of the deception, representing a new threat to the carmaker’s finances, reputation and management. For the first time, the suits connected Volkswagen’s chief executive, Matthias Müller, to the scandal, saying he was aware of a 2006 decision to not outfit Audi vehicles with equipment needed to meet American clean-air standards.
Volkswagen, which admitted late last year to equipping 11 million vehicles worldwide with software to cheat emissions tests, has maintained that the deception was limited to a small group of people. The company has said top management was not aware of the cheating software, known as a defeat device. But the New York civil complaint, drawing on internal Volkswagen documents, emails and witness statements, depicts a corporate culture that allowed a “willful and systematic scheme of cheating.” The evidence paints the most detailed picture yet about how the deception unfolded and who was responsible. … The suits stopped short of accusing Mr. Müller of having specific knowledge of the devices.
The suit does name other names, however, accusing several major figures in Volkswagen’s leadership of wrongdoing and also taking aim at the company’s board:
At Fast Company, Katherine Newman and Hella Winston discuss how US subsidiaries of German companies are trying to replicate their home country’s successful model of vocational education and apprenticeships:
MTU, whose parent company is in Friedrichasfen, Germany, is just one example. A subsidiary of Rolls-Royce Power Systems, the company manufactures diesel engines in Aiken, South Carolina. In March 2010, MTU took in over 600 applications for the available line jobs. It interviewed 250 people and picked 60—mainly experienced mechanics who’d previously worked in the area’s auto body shops, car dealerships, and Jiffy Lube stations. But after that initial wave of hiring, the company came to the conclusion it had tapped out all of the labor that was skilled enough to meet its requirements.
In Germany, by contrast, MTU would’ve had a long line of apprentices to fill additional jobs. But in Aiken, it had nothing. So the company decided to start an apprenticeship program, modeled directly on the dual program in Germany. Twelve students from five of the high schools that feed into a regional Tech Center compete for six slots every year.
The future is a robot’s world, or so we’re told. The World Economic Forum predicts that 5 million jobs will be lost to automation in the next five years, and visionary businesses like Amazon are going all-in on robots to drive down costs and improve speed and efficiency, so if employees are worried about losing their jobs to machines or algorithms, it’s no wonder. In this environment, it’s noteworthy to see an organization doing the opposite and replacing robots with humans, but that’s exactly what’s happening on Mercedes-Benz’s production lines, Elisabeth Behrmann and Christoph Rauwald report at Bloomberg:
“Robots can’t deal with the degree of individualization and the many variants that we have today,” Markus Schaefer, the German automaker’s head of production, said at its factory in Sindelfingen, the anchor of the Daimler AG unit’s global manufacturing network. “We’re saving money and safeguarding our future by employing more people.” … The impetus for the shift is versatility. While robots are good at reliably and repeatedly performing defined tasks, they’re not good at adapting. That’s increasingly in demand amid a broader offering of models, each with more and more features.
“The variety is too much to take on for the machines,” said Schaefer, who’s pushing to reduce the hours needed to produce a car to 30 from 61 in 2005. “They can’t work with all the different options and keep pace with changes.”