http://finance.yahoo.com/news/vw-freeze-promotions-due-emissions-104248653.html
Now all the plans of Volkswagen are about how to cut cost including re-use as many parts as possible in the next generation of its popular Golf model and cut the investment plan at its VW division in order to recover from the scandal as soon as possible. However, when VW's response for if they would have to cut jobs is "We are driving in thick fog at the moment." I think VW would not cut jobs. At least they did not cut jobs in China. I think one reason is that recent China cut the purchase tax from 10% to 5% for sub-1.6 liter cars. This announce boosted the sales of VW in China, and let VW feel the hope. Although VW is still in trouble, but I believe they will come back.
5 comments:
Although VW may be trying all possible tactics to get their company back into shape, the brand will never look the same to consumers and the firm will never fully be able to return to normality. Also, with the consumer confidence of the firm so low, it will take strenuous amounts of time to boost up consumer confidence to the level it was previously at. It will be interesting to see how able VW is to get back on track and earn their trust back. It will also be interesting watching their stock through this time of turmoil.
SOme people think that the Volkswagen scandal may put the company out of business. I'm not sure just yet if this will happen, but consumer's view of them is forever changes. I don't know if customers can ever trust volkswagen again. They may be increasing their sales in China, but that is only one market they operate in. It will be interesting to see their strategies for how they will handle their situation, but I am excited to see what will happen to them.
I also agree with the above comments and feel that VW will definitely struggle to pull the previously brand loyal customers their way. It will be interesting to see how they are going to strategize to come back strongly to the American market, despite doing great in China. In the meantime, what the other automakers are going to do to take advantage of this situation and try to increase their shares in the market will be something worth watching.
There is no doubt that VW is in trouble in multiple areas; however, that being said, I don't agree with the drastic assertions that this scandal will be the end for them. It will be very interesting to see which direction they head in order to cut costs in an attempt to cover their expenses as a result of the scandal nonetheless. My opinion on the situation is that it will take time for their American reputation to fix itself and for them to regain the image they once had.
Hofmann's use of the metaphor when asked about the affect of the cost of the scandal is intentionally ambigious how ever it is clear that Volkswagon's decision not to award promotions intentionally keeps wages relatively lower. Additionally, the higher-end brands such as Audi and Porsche are predicted to keep hiring. With wage differentials between the brands, is there a possibility that managers who are denied promotions will seek out employment with in the shielded brans and effectively earn more?
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