Volkswagen Investor Group Demands Pay Cuts For Executives

These guys are after the real long term issue at VW which is that it has done little to deal with its lack of productivity and cost efficiency relative to the rest of the industry. In the short term they ought to use the diesel crisis to team up with the unions and demand that the dividends on the voting stock be dropped until the cash level gets back to where it was pre-scandal. That will deprive the families of their income. The second move is get the bonuses under control with clear benchmark as to how much is paid.

No surprise here. This food fight has only just begun. Management vs labor vs dealers vs investors vs local German government vs customers vs lawyers. There is a lot of financial pain to go around. The internal and external distrust will linger for years despite the PR spin being put out.

I honestly think VW doesn't think it did anything wrong.

If they did, the head of VW would have a commercial on American TV that says "I am Matthias Müller. I run VW. My predecessors allowed the company to cheat. There is no excuse for that. It is my job to ensure honesty, to protect consumers, and to return VW to the trouble-free products we made when we first came to America. You have my word on this."

Years ago - American car companies made basic cars - with straight 6 engines - crank windows - 3 on the column - radio and heat optional - and they went forwards and backwards and ran forever. Then AMerican cars added power windows, power steering, power door locks, I once had a car with a pushbutton power ash tray - and the cars started to have problems - but Foreign manufacturers came - and they made cars with flat four engines, crank windows, 3 speed on the floor, air cooled (no radiator - no water pump) - no power steering or brakes - radio and heater optional - and they went forward and backwards and worked forever. ANd Americans bought lots of them. And while people fantasize about just how reliable and cheap to fix these cars were - they forget that they had no room inside - even less trunk space - and a well conditioned runner could accelerate faster then they could. But because there was an almost unlimited supply of repair parts that just bolted on and off (Often these cars has multiple colors on the road) - they were the ideal first car. And we did all of the service on our cars ourselves.

Today - virtually all cars have power steering, anti-lock power brakes, power door locks, power windows (what's a crank?), DOHC Turbo small 4 cyulinder engines with variable cam timing, 6-8 speed automatic transmissions, and even a radio and heater standard! ANd with LOTS of possibilities of things to go wrong - along with a generation of owners that no longer even knows how to change the oil - it is simply Not possible to make the cars as bullet proof and easy to fix as the original beetle. Even most Bicycles today have 10 speed transmissions - something only racers had when the original beetle came here.

For all the things they have and do - it is a wonder for them to be anywhere near as reliable as the beetle - but in reality - the problem is WHEN THEY DO BREAK- it can seem like the repairs are more than the car is worth. If people are waiting for a car as reliable as an original beetle - it won't be coming from ANY manufacturer.

However - IF VW wants to re-enter the American market - they do have other possibilities - including other BRANDS they could use. SKODA would seem appropriate. NOW they could even use VW (Audi seems unaffected) - but they would need to produce cars for the American Market - as the Japanese do - that are less conservative - and meet the size and space requirements of Americans who do not like Hatchbacks. And they need to remember that VW is perceived as an ENTRY level car in the USA - not an upmarket one - so their prices would have to reflect this. Five years from now however - the cheating scandal will be history and forgotten. BUT to get the best and the Brightest management - VW will have to PAY for it - that won't change either.