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original by phoenix auto volkswagen group's layoffs have spread from germany to china. europe's largest automaker is carrying out a global cost-cutting campaign.

after the news broke earlier this month that it might lay off 30,000 employees in germany, market sources said on september 23 that volkswagen china planned to carry out layoffs in stages, and it is expected that hundreds of local employees will be laid off at the group level.

volkswagen china responded to phoenix auto that volkswagen group (china), like all its other departments, actively participates in and supports global performance plans. specific measures include adjusting the organizational structure, improving the digital level of work processes, strengthening collaboration among brands and departments in china, and enhancing the localization of projects.

in germany, this week volkswagen will engage in a game with trade unions that will affect the careers of tens of thousands of german workers.

volkswagen will hold collective negotiations with the ig metall trade union on september 25. if no consensus can be reached in this negotiation, which is called "the most difficult negotiation in nearly a decade", the union will consider a warning strike on december 1.

volkswagen group ceo oliver blume may still find it hard to forget the confused and embarrassed face captured by the camera when his speech at the volkswagen employee meeting held on september 4 earlier this month was interrupted by the union's protest.

obermu did have plenty of reason to be embarrassed.

after all, "we are 'volkswagen'! you are not!" this rare face-to-face quarrel not only means that the two sides have torn their faces apart, but also, combined with volkswagen's history, it foreshadows that the ceo's position is shaky.

on september 2, blume announced that it would further increase cost-cutting measures for volkswagen brands.

blume not only tore up the employment guarantee agreement that had been agreed with the union and was valid until 2029, but also no longer ruled out the possibility of layoffs in germany and planned to directly close two german factories. since 1994, the employment guarantee agreement has never been shaken by either party, and closing local factories is unheard of since volkswagen was born.

volkswagen's "big plan" not only ignited the powder keg within the company, but also shook germany's "foundation".

immediately, stephan weil, the governor of lower saxony where wolfsburg is located, called on volkswagen to consider all possible options, including a "four-day workweek" to avoid layoffs and factory closures. the berlin government quickly introduced a draft tax deduction for corporate car purchases on september 5, hoping to reverse the continued sluggishness of the german auto industry.

at the higher level of the eu headquarters, in addition to the growing calls for the eu to introduce pan-european electric vehicle subsidies, the audi factory in brussels not only had a farce in which employees stole the keys to 200 q8 e-trons to protest against rumors of factory closure, but more than 10,000 local people took to the streets for a nationwide demonstration in support of the employees of the brussels audi factory and its suppliers, and called on the eu to update european industrial policy as soon as possible to protect jobs.

how did volkswagen get to where it is today? this question is not easy to answer.

volkswagen, which is trapped both internally and externally, is not only a negative example of a company with wrong decisions and serious internal strife, but also a microcosm of the stagnant development and chaotic policies in germany and even europe.

blume's profit comes first

if we must find someone most directly responsible for volkswagen's current predicament, then obermu is definitely to blame.

admittedly, blume, who only took over as the helm of the volkswagen group in september 2022, should not be blamed for volkswagen's internal problems and changes in the global environment, but blume was willing to sacrifice sales to improve profitability, ensure profit priority, and vigorously promote cost reduction and efficiency improvement measures.

the ten goals listed by blume on the ppt during his speech two years ago later became the so-called "10-point action plan" and appeared in almost every press release of the group. at that time, the outside world focused only on the "incremental" issues such as the chinese market, the us market, product offensive, and in-vehicle software (cariad) among the ten key points, but almost no one could have predicted that blume's main focus in the past two years was actually the "performance plan."

take volkswagen as an example. according to blume's plan, the brand needs to cut one-fifth of administrative costs by 2026; shorten product development cycles from 50 months to 36 months; cancel plans to build a new r&d base in wolfsburg and expand the wolfsburg factory. in terms of financial figures, volkswagen needs to cut costs by 10 billion euros by 2026, and increase its return on sales to 6.5%.

this is also the direct cause of the current volkswagen crisis.

last year, volkswagen tried a variety of methods, including freezing new recruitment, encouraging employees to voluntarily resign or retire early, dismissing temporary workers, freezing salary increases for the highest salary levels, reforming sales channels, and forcibly rolling out the agency model, in order to comply with obermud's cost-reduction requirements.

unfortunately, thomas schäfer, head of the volkswagen brand, announced that the actual cost reduction results this year are still 2 billion to 3 billion euros away from the target. if extrapolated to 2026, the gap between the current cost reduction measures and the target will reach 5 billion euros. the financial report data for the first half of this year showed that the sales return rate of the volkswagen brand fell from 4% last year to 2.3%. it seems that the more costs are reduced, the more distant the 6.5% target is.

according to volkswagen group cfo arno antlitz, "we are spending money faster than we make money." according to blume, higher profit margins can ensure that the group has the financial resources to continue investing in electrification and digital transformation.

at first glance, this explanation seems reasonable, but it is actually somewhat untenable. after all, volkswagen's official earnings announcement in march this year stated that "the group's investment will reach its peak this year." according to the negotiation results, the group's five-year plan from 2025 to 2029 has confirmed that the investment amount will drop by 10 billion euros from the previous five-year plan to 170 billion euros.

increase dividends while reducing costs and increasing efficiency

in fact, if the profit margin column is deleted from the financial report, volkswagen group will not be in any crisis at all.

the group has achieved rapid revenue growth for four consecutive years, taking advantage of the price increase caused by the covid-19 pandemic. from 2020 to 2023, the four sets of figures are impeccable, 222.9 billion euros, 250.2 billion euros, 279.1 billion euros, and 322.3 billion euros, with a cumulative revenue growth of more than 50% in the four years. considering that the revenue in the first half of this year was 158.8 billion euros, it is almost certain that volkswagen will not have negative growth this year.

this is enough to explain why volkswagen's unions are so angry.

if the crisis exaggerated by the management is low profitability and rate of return, at a time when the group's investment has already peaked, this seems to be a crisis only for shareholders and investors, and not for the company's employees - not to mention that the price of resolving the so-called crisis is the employees' jobs.

a widely circulated, slightly conspiracy-theory explanation is that as ceo, blume represents the interests of capital to a greater extent, especially the porsche-piech family.

indeed, blume's successor to herbert diess at the helm of the volkswagen group is closely related to the strong support of the porsche family. blume had previously served as the production director and ceo of the porsche brand, but had never worked at the volkswagen brand, which is extremely rare among the ceos of the volkswagen group, which has complex internal relationships.

three years ago, blume won the trust of the porsche family during the ipo of porsche brand independent of the group, which also made him the only dual ceo among the 40 dax blue chip companies. at the time of transformation of the automotive industry, the outside world has always called for blume to give up the position of porsche ceo to concentrate on volkswagen group, but it has never shaken blume's position.

blume's friendliness towards capital rather than labor can be seen from volkswagen's generous dividends in recent years. half of the more than 15 billion euros of fresh funds obtained by volkswagen group during the porsche ipo was returned to shareholders by blume in the form of special dividends. in the past few years, blume's cost-cutting measures have driven away temporary workers, cut employee salaries and various benefits, and even compressed r&d investment in the next five years, but this has not affected volkswagen group's annual dividend increase.

since 2021, volkswagen's dividends on common and preferred shares have increased from 4.8 euros and 4.86 euros to 7.5 euros and 7.56 euros (2022), 8.7 euros and 8.76 euros (2023), and 9 euros and 9.06 euros (2024), respectively, far exceeding the return on sales. compared with the total dividend of about 11 billion euros in 2024, the cost reduction effect of volkswagen's layoffs and factory closures in germany this time is only about 3 billion euros.

outside the capital market, blume's profit-first strategy is also clearly reflected in its product offensive. just like the "wishful thinking" of mercedes-benz group ceo ola källenius, volkswagen chose to enter the electric vehicle market from the "more profitable" mid-to-high-end segment, as the electric vehicle profit per vehicle is far lower than that of gasoline vehicles, which is a shortcoming that lowers the group's profit margin.

after id.3 and id.4, volkswagen's electric vehicle offensive is concentrated on id.7 based on meb platform and porsche e-macca and audi q6 e-tron based on ppe platform. as for sinking into the lower-tier markets to find the essence of volkswagen brand and launching affordable electric vehicles below 30,000 euros (240,000 yuan) for the public, it is not the focus of the current management.

the id.2, priced at 25,000 euros, and the id.1, priced at 20,000 euros, were once seen as volkswagen's hope to reverse its decline. however, due to cost control issues, after it was determined that the seat brand would be in charge, the id.2 was no longer a priority for thomas schäfer, head of the volkswagen brand, and the id.2 will not be released until 2026. as for the id.1, which has more stringent cost control requirements, renault had hoped to jointly develop it with volkswagen to spread the cost, but volkswagen announced in may this year that it would withdraw from cooperation negotiations, and the id.1 will have to wait until at least 2028 to roll off the assembly line.

when mid-to-high-end models with higher profit margins are not selling well, can the unsustainable profit-first strategy only be achieved by reducing costs?

kallenius did not give an answer to this question, and neither did obermu.

all inpure electric: a failed gamble

of course, the root cause of volkswagen’s predicament can be traced back to the era of former ceo diess and his overly aggressive all-in pure electric strategy.

to some extent, diess's bet on electrification is also due to the current situation, but this did not shake his announcement of planning round 70 in 2021 and investment of more than 159 billion euros in five years, of which 89 billion euros will be used for electrification and intelligent research and development. compared with the plan of diess's predecessor, volkswagen ceo matthias mueller, to invest 20 billion euros by 2030, it can be said to be a step forward.

after that, the investment opportunity amount for the next five years further increased to 180 billion euros. the excessive investment was also the reason why diess agreed to split the group's "profit cow" porsche brand and list it separately through an ipo in the last year of his tenure. after all, the volkswagen group urgently needs fresh funds.

in contrast, toyota, which is of the same size as volkswagen, is much more conservative. as of the end of 2022, toyota's massive plan to launch 30 electric models by 2030 cost only 4 trillion yen (about 27 billion euros). even if toyota's other 4 trillion yen plan in hybrid, hydrogen fuel cells and other green fields is included, it is still far less than volkswagen's big investment.

general motors and ford, the second-tier companies, announced total electrification investments of us$35 billion and us$30 billion respectively (2021-2025) in the same period of 2021. even stellantis, the second largest automotive group in europe and the fourth largest in the world, announced an electrification investment of "only" at least 30 billion euros in the same year.

diess's "rapid progress" has promoted volkswagen's electrification transformation. the three major electric platforms, meb, ppe, and ssp, set the framework for the group's electric models in the next decade. at volkswagen's first "battery day" event in 2021, diess further announced that six new battery super factories will be built in europe, with an estimated production capacity of 240 gwh - this does not include volkswagen's investment of 7 billion canadian dollars in canada last year to build another battery factory.

compared with other vehicle manufacturers whose electrification investments of hundreds of millions of dollars are enough to make media announcements, volkswagen's investment of less than 5 billion us dollars does not seem to be enough to make news.

however, the foundation supporting volkswagen's all-in electric drive is unrealistic and blindly optimistic market expectations.

when volkswagen announced its so-called "2030 strategy" in 2021, it mentioned that by 2030, the proportion of the group's pure electric vehicle sales will rise to 50%, and the proportion will rise to 60% in europe; by 2040, the group's new car sales in major global markets will be close to zero emissions; and by 2050 at the latest, the group will achieve carbon neutrality.

if calculated based on the market expectation of one million electric vehicles per year in europe, volkswagen's surprise investment is not conservative. however, the harsh reality is that even after four years, the pure electric sales of the entire group in the first half of 2024 accounted for only 7.3%, and the global pure electric sales were only 317,200 vehicles, a year-on-year decrease of 1.4%. specifically in key markets, china's pure electric sales in the first half of the year were 90,600 vehicles, a year-on-year increase of 45.2%, which is still satisfactory, while the pure electric sales in europe were 184,100, a year-on-year decrease of 15.2%.

compared with the chinese market where joint venture brands are losing ground under the attack of local new forces, the problem in the european and american markets is the double blow of a weakening overall environment and the fact that electric vehicles are no longer popular.

germany's electric car market continues to shrink

statistics from the european automobile manufacturers association acea show that as of july, passenger car sales in the eu and the european economic area were 6.537 million and 7.906 million, respectively, both up slightly by 3.9% year-on-year. however, sales of 815,000 pure electric vehicles in the eu shrank by 0.4%, and the penetration rate of new energy vehicles including plug-in hybrids was only 19.4%.

specifically in the german market, the situation is even more pessimistic. taking the new registration data of passenger cars in august as an example, germany's new car registration in that month shrank by 27.8% year-on-year, among which electric vehicles fell by 69% year-on-year, further widening the decline after falling by 16% and 37% year-on-year in june and july respectively - the story of electric vehicle sales ever-increasing can no longer be told.

(the german association of the automotive industry estimates that the country's electric vehicle sales will fall by 14% in 2024. data source: german association of the automotive industry)

although the exaggerated decline cannot fully reflect the true market situation. after all, the deadline for subsidies for corporate electric vehicles in september last year disproportionately pushed up the sales base in august last year. however, the decline in electric vehicle sales for three consecutive months is not accidental.

on the surface, the german government's sudden announcement to cancel subsidies for electric vehicles at the beginning of this year was the direct cause of the current lack of interest in electric vehicles. in the first three months of this year, after the subsidies for manufacturers including volkswagen expired in april, electric vehicle sales began to plummet. from a deeper perspective, the root cause of the subsidy reduction and sales decline is the weakening german economy.

the root cause of the subsidy cancellation is the 60 billion euro fiscal hole created by the german government at the end of last year to fill the energy crisis. the fragmented "traffic light" government also lacks the political courage to break the "debt brake" and issue more government bonds.

the hyperinflation that accompanied the energy crisis further eroded the purchasing power of european and german consumers. the eu and german consumer confidence indexes eucci and gfk in august were -12.3 and -22 respectively, which have been in the negative range for two consecutive years. the interest rate hike cycle of the european central bank and the federal reserve has also pushed up the cost of car loans. the current 10-year and 15-year car loan interest rates are 3.37% and 3.48%.

it is difficult to get back the money you spend

all-in electric vehicles without sales support are not only rootless duckweed, but also a serious waste of investment.

at present, all the six battery factories announced on battery day have been postponed indefinitely except the salzgitter factory in germany, the northvolt factory in sweden and the planned valencia factory in spain. the statement made by volkswagen group director thomas schmall when signing the north american battery factory contract with the canadian government that "volkswagen group's battery production capacity demand in north america is expected to be between 60 and 100 gwh" is even more empty talk.

unfortunately, it is not easy to recover the money the group has spent. the battery factory in ontario, canada has received a financial subsidy of 10 billion canadian dollars from the toronto government, and the tram production upgrades previously rolled out in the zwickau and emden factories in germany have also been irreversible - the final result is that obermu has been left with "over-infrastructure" with low capacity utilization: the wolfsburg main factory with a capacity utilization rate of about 50% in 2023, the dresden factory with a capacity utilization rate of 30%, and the osnabrück factory with a utilization rate of only 20%...

what is even more fatal is that diess’s all-in electric strategy is not only radical, but also equates all-in electric with all-in pure electric.

although diess himself has been relatively cautious in his past statements, volkswagen's "dislike" for plug-in hybrids is too obvious. after the russian-ukrainian conflict triggered a supply chain crisis, volkswagen immediately stopped the production and sales of hybrid models. thomas schäfer, head of the volkswagen brand, has repeatedly stated in the past two years that "hybrids are a technology of the past. forget hybrids, it's an expensive technology and not worth it."

a typical example of a sacrifice is the passat phev, a best-selling hybrid model that has not been updated for six years.

ironically, hybrids, which were seen as transitional by the public, have now become one of the few growth points. the group's hybrid sales in the first half of this year were 136,000 vehicles, a year-on-year increase of 17%. toyota's hybrid sales in 2023 were as high as 3.42 million vehicles, a year-on-year increase of 31.4%, far exceeding toyota's pitiful pure electric sales of 100,000 vehicles. looking at the entire eu market, as of july, sales of non-plug-in hybrids of 1.9356 million vehicles also increased by 22.8% year-on-year.

until may this year, thomas schäfer said in an interview with autocar that "given that the demand for electric vehicles is stable, this (hybrid) technology can be more widely used and improved." it is not yet known whether this means that volkswagen will turn again.

not-so-intelligent intelligence

volkswagen is not the only automaker that has gone all-in on electric vehicles but has been met with setbacks in the european and american markets, and this is not the only problem volkswagen faces in its transformation. another problem left over from the diess era is cariad.

christian senger, dirk hilgenberg, peter bosch, the speed with which cariad has changed its helmsmen is enough to show the severity of its problems.

the original intention of cariad was to bring together all the software talents and resources of the group, break down the barriers between more than ten brands, and work together to improve intelligent solutions for all brands. its core business is to develop and integrate the electronic and software architecture of the vehicle, the so-called end-to-end e3 (end-to-end electronic architecture), as well as the in-vehicle operating system vw.os and the car cloud service vw.os.

according to diess's idea, in conjunction with the three electric platforms meb, ppe and ssp, cariad will adapt to the three architectures e3 1.1, e3 1.2 and e3 2.0 to meet different levels of intelligent solutions.

as a typical example of volkswagen's reckless behavior during the diess era, cariad made a bold promise at the beginning, striving to increase the proportion of self-developed code from 10% to 70% in one go and recruit more than 10,000 software talents. in fact, cariad has never recruited 10,000 employees, nor has it completed the tasks assigned by the group on time.

starting from the e3 1.1 architecture, cariad's flawed project management and code quality have led to the id. family's first show, id.3, being parked at berlin airport to collect dust after leaving the zwickau factory production line, waiting for cariad to fix the software bug and manually brush the car. the even more disastrous performance of e3 1.2 has caused the models developed by audi and porsche brands based on the ppe platform to be postponed for three years. in particular, the continuous delays of the porsche electric macan and audi q6 e-tron have resulted in the volkswagen group, which lacks high-end electric models, being unable to improve its profitability in the electric field. the current situation of relying solely on meb platform-based, uncompetitive models has repeatedly damaged volkswagen's image.

cariad not only makes it impossible for the group to increase revenue, but also rapidly bleeds the group and further dilutes the group's return rate. in the past three years, cariad has recorded huge losses of 3.395 billion euros, 2.068 billion euros and 2.39 billion euros respectively.

faced with the mess left by diess, blume, who has already swung his "machete" at the local factory, is not only unable to actually stop the bleeding, but the plan of cariad to lay off 2,000 people to cut costs that was exposed last year has also come to nothing. blume can only choose to open another track and overturn the path planned by diess. volkswagen has successively announced that it has invested in xiaopeng and signed an electronic and electrical architecture technology cooperation agreement, established a joint venture with rivian of the united states with an equal equity ratio, and will obtain the right to use rivian's software and electrical architecture. the two sets of special electronic and electrical architectures that are tentatively only applicable to china and the united states have undoubtedly marginalized cariad and its three e3 architectures. the additional expenses of the two collaborations, which cost us$700 million and us$5 billion respectively, combined with cariad's losses over the years, almost completely ate up all the funds raised by the volkswagen group to spin off the porsche brand.

if the cooperation with xiaopeng and rivian is an alternative that has to be taken out of necessity, then the changes to the automotive cloud service vw.ac are a typical overcorrection.

although many of diess's plans are aggressive, there is nothing wrong with the direction of vw.ac, a joint venture established with microsoft in 2018, which aims to provide unified and standardized cloud services for all brands of the group.

however, according to a vw.ac employee in virginia, usa, who revealed to phoenix news reporters, blume's cost-cutting measures for 2023 include the complete dissolution of vw.ac within three years. its functions will be replaced by a series of incompatible independent cloud platforms such as odp 1.0, odp 1.5, and cdp from german local software suppliers. employees at cariad headquarters also told phoenix news that the german side is unwilling to bear the hundreds of millions of dollars in annual expenses of vw.ac, headquartered in seattle. although replacing expensive vw.ac with cheaper german programmers in the short term can have an immediate effect on financial reports, this short-sighted move against standardization is not only contrary to the future cross-brand ssp electric platform design, but also exacerbates the trend of brands within the group fighting each other.

internal conflicts are also one of the core reasons why cariad became a mess - after all, the business capabilities of the german software engineers who were able to design siemens industrial software were not so poor.

as a subsidiary of the volkswagen group that serves all brands, cariad has naturally become a stage for competition among brands. the most acute conflict is between the audi brand, where cariad is headquartered, and the porsche brand, which is directly under the control of blume.

vw.ac employees told phoenix auto that porsche, which has a more aggressive work culture, has led the development of the e3 2.0 architecture almost from the beginning due to its faster r&d progress. audi, which is keen on following procedures and has obvious big company problems, has always been led by the nose because it lags behind step by step. a typical operation is that porsche can quickly formulate software feature requests and occupy the human resources of cariad's related departments, while the software feature requests proposed by audi, which is slower to respond, can only be postponed indefinitely.

porsche's dominance and even its lack of cooperation with the group were already very obvious before blume became the ceo of volkswagen group. as early as the early days of cariad, blume flew to silicon valley many times to discuss with apple ceo cook about adapting apple carplay to porsche. although this move can be interpreted as blume's management style focusing more on cooperation with suppliers and technology giants compared to diess, it can also be understood as blume openly deviating from the group's software strategy at the time.

from wolfsburg to china: where is volkswagen heading?

if the setbacks in the transformation to electrification and intelligence are the two major arterial incisions that volkswagen cannot stop bleeding from, then the sluggishness of the chinese market is undoubtedly equivalent to strangling volkswagen's blood transfusion tube.

blume, who graduated with a doctorate from tongji university, is more familiar with china than any of his predecessors. he led the entire board of directors to attend the shanghai auto show, reached a number of cooperation agreements with xiaopeng, horizon robotics, thundersoft, and guoxuan high-tech, and built a gold-label volkswagen in hefei...

it can be said that obermu has worked hard, but the results are still far from satisfactory.

in 2023, volkswagen group will produce 3.236 million new cars in china, which is far from the peak of 4 million. in the first half of 2024, the group's sales in china were 1.345 million, down 7.4% year-on-year. not only has it been left behind by byd, it seems that maintaining annual sales of 3 million has become challenging. as for the electric car sales of 191,800 last year and more than 90,000 in the first half of this year, they are even more insignificant.

the profit issue that blume is most concerned about is even worse in the chinese market. in the first half of this year, volkswagen's operating profit in china was only 801 million euros, a year-on-year decline of 30% and a 43% decline compared with the same period in 2022. especially in the second quarter, volkswagen even suffered a loss of 193 million euros in china.

regardless of whether the slogan "in china, for china" can help volkswagen reverse its decline in china, at least blume has listed china's predicament as the core reason for layoffs and factory closures in china.

"there will be no more checks from china", "new competitors are entering the european market, and germany's competitiveness as a manufacturing base is falling further behind." these two excerpts from blume's statement undoubtedly allude to the sluggishness of china's cash cows and the impact of china's overseas electric vehicle exports on the european market.

this set of china threat theory obviously did not scare daniela cavallo, the president of volkswagen's labor union. "the company's difficulties are mainly due to the management's wrong decision-making" is the conclusion reached by the labor union.

according to data from handelsblatt, 2.6 billion euros of the profit surplus from the chinese market was remitted back to the wolfsburg headquarters last year. although this is a large amount, it is indeed a drop in the bucket compared to the expenditures of cariad, dividends and battery factory investments, which all exceeded 10 billion euros.

even in the 2010s when volkswagen was at its peak in china, the profitability of the volkswagen brand, which was supported by the chinese market, was even lower than it is today. in the seven years from 2010 to 2016, the sales return rate of the volkswagen brand never exceeded 4%, and was even lower than 3% for five of them. the best performance of diess, known as the "cost killer", after taking office was only 4.3% in 2019. this is enough to prove how unrealistic the 6.5% return rate set by blume is, and how perfunctory it is to blame the problem on china.

as for the so-called new competitors entering the european market, blume's talk is nonsense. data from both schmidt automotive research, an automotive consulting firm, and dataforce, a data analysis company, show that byd, a pioneer in overseas markets, has accumulated sales of only 16,122 to 21,409 vehicles this year. the number of new car registrations in the german market is less than 1,500. this is completely insufficient to explain volkswagen's current predicament.

a comparison that may be embarrassing for blume comes from within the group. the sales of volkswagen's id.3 and id.4 in europe in the first half of this year were only 32,470 and 33,510, which is not satisfactory, even lower than the best-selling export model made in china, the mg 4. however, the sales of skoda's enyaq and audi q4 e-tron are better than the id. series. it seems that the volkswagen brand is the "problem child" within the volkswagen group.

blume's lack of sincerity in using the china issue as a shield has obviously further intensified the conflict with the union. on september 10, after the group's human resources director gunnar kilian formally abolished the employment guarantee agreement, the union president daniela cavallo immediately announced that they would "firmly resist this historic attack on our jobs."

the volkswagen brand not only has a long history of trade union traditions, but its trade union representatives also occupy 10 of the 20 seats on the supervisory board. even at the shareholder level, the lower saxony state government, which regards employment opportunities as its core demand, is the group's second largest shareholder with a 20% stake.

according to historical experience, ceos who fall out with unions will have to face the triple pressure of strike threats, supervisory boards and shareholders' meetings. when the union has shouted radical slogans, it will be a question mark how long the ceo can stay in the chair.

the good news is that blume at least received support from former ceo diess in an interview, who said that "the public needs drastic and painful treatments"; the bad news is that blume may not want to follow in diess's footsteps and be kicked out early.

(text/qian boyan, from frankfurt, germany; edited by zuo maoxuan)

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