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I can see a lot of Germans coping in the comments how net salary is much smaller actually, how rent and groceries are larger than in China, how German cars are better quality etc. IT DOES NOT MATTER!!! If there is no market, no buyers then it does not matter. One of the first thing I learned as an entrepreneur is don't create a product nobody wants to buy.
Nobody is talking about FIRE (finance, insurance, real estate) sector eating everyone's lunch. And taxes. In Germany as in much of Europe, the state takes 50% of your gross income. And then from what's left you pay 30-50% for your apartment rent or credit. And let's not forget Germany's suicidal energy policies. This is what is destroying the Western industry. Most of the industries in Europe, especially those which consume a lot of energy will go the VW path. Bankruptcy. That's what happens when you have idiots and quislings in charge.
@@thewolf9851 You are commenting under a video about Volkswagen's big problems with selling cars that are forcing it to close several factories in Germany. Just saying.
Vw had all the time in the world to take corrective measures and safeguard their own future, and have nobody to blame for their mess apart from themselves.
My father was a cash register repairman in the 1960’s. He saw the handwriting on the wall when transistors started replacing mechanical parts. He moved the family to NCR headquarters in Dayton and was retrained as a coder. But he was virtually the only one; everyone else lost their jobs. The company shriveled to from a large conglomerate competing with IBM across product lines to a niche brand making ATMs.
7:25 "Labor cost in Germany are 79 E/hr, that's like getting PAID 150 $/hr in Australia". Not exactly PAID 150/hr. Keep in mind, labor cost include all the benefits like insurance, pension etcetera. Workers are not getting 79/hr in their pay check, the TOTAL labor cost includes the wage plus everything else. Love your channel, sir keep up the great work!
Sam, you don't even know what gross and net income is. Your statement about what German workers earn is incorrect since you confuse gross with net...and even from net there are going off 19% and 9% of VAT...not to forget that inflation is being used so tgat people spend instead of save their money.
@@paulc6766 Yes, quality was terrible - but the fundamentals were better than, as people were buying the type of cars they were making :) Today everyone makes huge expensive cars that go wrong, or are simply unsuitable for various reasons - that no one can afford !
@@Greggspies Haha, I know, I was there - the Allegro, the Montego, The Marina - horrors. Then the car that was supposed to save it - The Metro, a car that wore out its suspension faster than it's strange looks :D
The 'Gernan Engineering' myth is over, they have to face the consequence of high labor cost, dated technology, lack of factory investment, bad management, etc.
The real problems are high energy costs due to the stupidity of closing nuclear power down and the loss of cheap gas from Russia together with lack of demand for electric cars they are committed to produce. All self-inflicted issues resulting from left wing government policies.
Indeed this slogan is a myth. Just got karcher vacuum cleaner and something that never saw happening with any vacuums in the past happened with karcher, supposedly German engineering and manufacturing - suction pipe broke within 4 weeks whilst vacuuming carpet
why do you not simply accept it is the EU making. W/o the GD and induced electrification, people would have continue to afford new cars and companies would still be manufacturing them. They broke everyone, and it's extremely likely they knew what they were doing. So it is politics, not engineering that busted the myth.
Having lived in Germany and worked in the auto industry there, in previous downturns, the industry would kick and scream but eventually make the necessary changes to make the cars more competitive with Asian brands. Adding Air conditioning, cup holders or electric windows as standard, for example. Fairly easy stuff although it always took a crisis for something to happen. Labour strikes would largely be avoided by increasing wages and/or cutting hours, keeping the workforce intact (hardly ever any layoffs). Now, there are fundamental changes in vehicle manufacturing and German companies were asleep at the wheel. I'm not sure they can catch up this time.
so tell us. is the labor cost real? 130k per employee? sounds a little high for a line worker. sounds like they are lumping in the high paid office people.
@@Mike-Minion probably they also calculated the C-level salaries and those pull up the average but even with 50% tax, I don't think an assembly worker gets home with 6k every month after tax.
Asleep, no. They willingly chose to pursue electrification unilaterally at domestic locations. ID.4 in US is riddled with problems the dealers can't fix. Too fast in retrospect. Might not be savable by Mexican labor advantage alone. Big headaches ahead for 10-years at least.
Sorry VW and others, you literally trained an entire Chinese workforce how to make cars over the last 20 years, what did you think was going to happen?
@@jessicayoung1190 Telsa is one company that sells the most BEVs in the world. In fact, it is outselling BYD BEVs in China where BYD is heavily subsidized by the CCP. That's saying a lot.
🇩🇪 for decades have been making mediocre cars and sold at a hefty premium because of the myth of superior engineering and quality. Like 🇯🇵 they have had it too good for too long. About time 👎
Even if it's better doesn't mean it's necessary or that people can afford the extra cost. Sometimes the best seller isn't the best product it's just the best combination of price and functionality
VW is going to be bailed out by Germany. EU will think of an excuse to allow it, because it's Germany. VW has been jobs program for decades, this is just natural outcome.
Some of the highest wages for assembly workers in the UK were Ford engine assembly in Bridgend, South Wales. When the plant closed I did heard the redundancy package was over 200k for long term employees
As you said, 7000 per vehicle in Germany vs China less than 2000, in worst case scenario that is 5500 more cost per vehicle. Still there is no explanation why same car in Europe is 20000 more costly than in China (taking here about VW vehicles, not imported ones).
Really explains alot why you ask that… a german car against a car made in china… if you cant think why the china car is cheaper you need to go back to school… oh me us here in the UK are fooked if this is what you all think! Thick as…
I would guess Energy and resources cost way more in Germany, as well as all the development costs driven higher by ever stricter regulations and bureaucracy. Like the UNECE rules, although china has similar laws as well
The downfall of Volkswagen was absolutely inevitable. VW was known for extremely reliable and extremely well engineered cars with a timeless styling and without much "bling". Because of that a lot of people were willing to pay a bit more money for their cars. Building such cars is impossible today because all those ridiculous regulations literally ban those cars. Beeping and blinking plastic crap can be made cheaper elsewhere.
Yeah but that's not because tesla offers its workers enough job loyalty protection... Musk is just evil. Billionaires don't like normal workers - they just use them and throw them away. Workers do need protections from fiends like that - union or not.
That's right -- because unions are the real enemy of average people -- not billionaires who are getting richer and richer while everyone struggles. 😂🤣😆
In China a Golf costs 20k, in Germany 38k. There are 39 VW factories in China, 10 VW factories in Germany. Maybe VW needs to sell Chinese Golfs around the world??
All of Germany is high cost, not just automotive. The outcome of this is obvious to anybody that has any sense. Both German management and the employees/Unions are ignoring reality.
@@ISuperTed It's not just automotive, there isn't a single industry where EU products can be competitive and that's because of the EU legislation. You can't go net zero in Europe, while the rest of the World is not playing by the same set of rules. In communist environments, Ideology rules over business and common sense, then sooner or later, everything falls apart.
@@mirceaalexandru400 In communist China they are building more atomic energy. They are buying more cheap, clean reliable natural gas. They are building and innovating EVs like no other country. The Chinese communist government actually cares about economic growth. The EU unelected bureaurcrats do not, they care about power. Total, uncontested, unquestioned, power.
Sam, your vids are full of info. That's hard for some doing things the old way. But we still strive to show a more efficient and clean. Thanks blessings to your family 🙏🙏💗
German car makers are experiencing what British shipbuilders went through decades ago. At the end of the 19th century, Britain produced the majority of the world’s ships, nowadays we make only a tiny fraction as our cost base is huge compared to the Chinese, Koreans etc….there’s no going back to the glory days for German auto makers, they’re all toast!
My understanding is that the second largest shareholder in VW, after the Porsche/Piech family, is the German state of Lower Saxony. I believe that is the reason the union has been invulnerable up to this point. Interesting times. Thanks for your insight Sam.
also worth noting lower saxony once owned 100% of vw after henry ford and rover and gm refused to be given the company by the british government but they had to pay out royalties largely in shares for the design of the beetle to the porsche family and then the young ferry porsche wanted vw to make a special coupe version of the beetle and vw invested in him to start porsche. then daddy ferdinand porsche got out of prison for crimes against humanity in his part in the holocaust and took over porsche management for his death.
German workers have civil rights, health care, holidays etc etc What consumers need to learn is to support their own citizens and pay a little extra to buy local. Not only do you support the car manufacturers but all the allied industries that supply them, the people who feed and house them as well as the national services they support with their taxes. Buying cheap imports simply shifts large chunks of your economy overseas.
Correct, in these other countries they turn up for work and are told they are not needed today, or even no longer required. No redundancy pay or 28 days of consultation. Also when busy, they can unexpectedly be told to stay late for hours just as they expect to go home. etc..
I sure couldn't care less about the entitlement of being an early adopter of a +$€40,000 EV if that's all they're willing to ultimately trying to sell...
Just refer to them as Deutsche Leyland so they can understand what's going to happen. I'm a doctor in South Africa, drove German and English cars for decades but since 2021, Chinese, we're extremely satisfied. The first time I saw a Chinese car get a five star safety rating I said the game is over.
I wouldn’t want to drive any of their cars. The 2 VW’s I did own, the plastic in them cars deteriorated at 8 years old. The cars are crap. This morning I’m driving my kids to school and can’t wait to get in the Tesla…
In the UK there are 11 million of us without work, so not suprising that we can't afford any new car, Chinese, German whatever, Ill keep my 20 year old Rover 75 which will see me out. The Germans have had it easy too long dominating the market in the UK and EU. Now its changing
@@Julian_Wang-paiHe means 11M that are not working, not are unemployed. However he’s implying that there are 11M that could be working, which there aren’t. As you say it’s 1.5M registered.
Any serious public company that is facing this type of structural challenge immediately suspends their dividend. You can't afford to eject cash from the business when they desperately need to restructure.
Cutting the dividend won't do a whole lot for you if the competition's cost structure is far lower than yours. It's more of a nice gesture more than anything else.
All the non VW divisions are profitable. Those divisions can pay a dividend. The VW division needs to be restructured to be profitable, and shareholders shouldn't have to just funnel money from Lambo, Audi, Ducati, Porsche and Bentley to support inefficient VW.
@@JustinTipton China has lower labor costs, programs to help their auto companies to get started and grow plus a currency that gives them an edge in international sales. No matter how efficient VW can become, they still have other hurdles to deal with. Maybe Germany can insist the Chinese battery makers set up shop in Germany?
@@AQuietNightlol, what leverage does Germany have to insist on anything? 😅 They are in the EU, the Chinese can set up shop in Romania or Bulgaria and there is nothing that Germany can do about it
They are not dying out because they lost the EV competition with China. They are dying because regardless of EV or ICE, they produce expensive vehicles for bad quality and poor reliability. The labours at these factories don't understand that their salaries are super inflated compared to the other countries. Today they are asking for a raise while the factories are going to close down.
Legacy auto company factories *are* being closed down as petrol cars are utterly obsolete compared to EVs. Apart from Tesla, no one can make EVs as good as the Chinese. This is the heart of the matter. 🐼 🇨🇳
It's not even that high in The Netherlands. And we have a fairly good economy. Our minimum wage is around 1200 euro. It is also aged based, so the older you are the higher your minimum wage. It scales by law, but Germany seems like an outlier
And why is it so high? Renting prices are going through the roof and taxes are insane. Except for rich people who pay way less taxes. Sounds familiar, right? Germany needs a lot of restructuring… but no one wants to change anything. And so we keep the system running as is until it crashes.
I live close to Wolfsburg and have unfortunately to admit that often times VW offered unusual higher salaries than normal level in the region. Plus the work volume is often time even less. So lot of companies lost good trained people to VW which overpaid them. Now it seems VW gets the invoice for that exaggerated payment behaviour!
thank Frau Angela for shutting down all nuclear plants. You now have the most expensive energy in Europe. Who would have guessed high electricity prices can bankrupt businesses.
@@michalandrejmolnar3715 yep, gas it's only 3x (three times) more expensive in Germany than in the US. If you go further North, the difference is even bigger.
@@michalandrejmolnar3715 US cost of living is actually not that high among all the Western Nations. It is only High in Cities like New York City and State of California.
sounds like everyone in the German auto industry can take a %15 haircut and not miss a beat (especially after taxes) ,and yet here they are bickering . but, if blame was to be shared, I give 70% to management (and the shareholders). They are the ones who are supposed to see this coming and plan for it. They got rid of people who tried to warn them
Many western economies are at the same crossroad. Corrupted labor union involvement is outdated and ludicrous in high wage countries such as Germany ,Australia etc where they are striking even though they already have 6 figure salaries for basic labor.
No decision at board level can go through without votes from union representatives and the local government which owns 20% of shares. The high costs have been an issue for a long time, but were being covered by profits from abroad, especially China. The workers in Germany are basically on strike to be subsidized by workers in Poland, Slovakia, Portugal and China
There are experienced, college educated programmers looking for jobs. Good luck to a factory worker finding a programming job after they “learn to code.”
Learning to code is overrated. Here in Netherlands l, the workforce needs more blue collar repair craftsman. Electrical, plumbing, construction. They are good paying jobs too. You're welcome.
I am afraid that the work of IT specialists and programmers will become unnecessary in 90 percent of cases. This is a fact. Artificial intelligence will lead to their dismissal. The professions of the future are: plumber, bricklayer, etc.
The cost of living in Germany and Europe is through the roof. We’re being screwed over on energy and food as the governments impose draconian green taxes. Meanwhile, china opens 100 coal power stations a year. When I visited china there is no health and safety industry. That’s not saying it’s bad we have it in Europe but you can see how it adds to the costs. I watched people in a brand new airport fixing glass panels in by standing ion their tool boxes on a luggage trolly. It’s so much cheaper to do things in china when life has no value It’s all to do with the bloated economy and too many middle managers.
Cost of living in Europe is equal to the services they receive. Free healthcare. Free college. High quality of life with little suffering or hard work. Energy costs and food prices are reasonable for a population that doesn’t really need much
I agree, you don't compete, You cooperate. You form joint ventures, and you make the auto’s in Europe and America together with Chinese firms. Both the USA and Europe are threatened by the new technologies and have sought protection. They have this in common. Cooperation as the EU has demonstrated is the way to bring people together to achieve higher levels of attainment that you cannot do on your own. Yes, it is not easy. There will be huge change and disruption as you move to a win-win outcome. Something to think about.
Cost of labour wages. There are very high overheads per employee in Germany, aside from the wages - though i'd expect these are also higher than neighbouring countries, but not double,
@@thewolf9851There are multiple Big Markets now. China, Mexico , Vietnam, thailand, India are all low cost markets that have capability to develop their own cars.
How could you look at all that data and not include a major increase in energy costs now that Germany decided it didn’t want cheap Russian energy? All that machinery in those factories consume massive amounts of energy that is about four times the cost currently than it was. This is probably much more of an issue than labor cost.
Absolutely this, and while people rave on about EVs and all this China is the new king, the vast majority of the energy in China is derived from coal fired power stations running on Aussie coal. Don’t buy an EV, you are killing the planet.
Labour costs at the factory where cars are put together only accounts for about 5%. It'll affect the price by a couple 1000 for sure. But bad management is the real reason they will be going under, not labour costs.
@michael-qp9xd We are talking price difference between China and Germany, not labour cost per vehicle. He stated in this video it was 2-3k in China for labour and 7k in Germany. A 5k difference. Viking also stated in other videos that VW takes 3-4 times as long to put out a car like the ID4 as Tesla does with the model Y, and that Geely are at equal to or a little more ×1.5 Tesla's time. Those are work hours put into the car. Best case scenario is that VW takes x3 as long to put a car together. 7k/3=2.3k per car. Let's say that while China puts out a car three times faster, their labour isn't 3 times less. But there has to be some lack of efficiency in labour on top of the time to assemble. 2.3k vs 2k is probably not right, and it is probably 3-4k vs China's 2k if they can reduce time to assemble every vehicle. The Chinese model of car building is about efficiency, and that is where they are winning. So while Ford and Mercedes leave Brazil, BYD and Great Wall move in and build in Brazil and gobble up market share. Same labour costs, just a change in vehicles, vehicle types, and efficiency. Management rarely takes responsibility for its inadequacies, and labour costs is always the escape goat. We have seen this time and time again.
I don't understand what cost for labor means. Does it include only people who are involved in assembly? Does it include R&D? Does it include management cost?
The Viking is spot on, he talks facts and not emotion or nationalism.The game us up for the once great german auto industry,as we found out in britain in the 70s.Face the facts and move on,it is not the end of the world.
In Germany the cost for employers are much higher per employee, this is called Lohnnebenkosten. The average worker gets (before taxes) Most likely less than 40 Euros per hour. The 1xx Euro per hour seems like Accounting shenanigans.
Exactly this, cost of labor is cheap in China and high in Germany. This isn't surprising at all. It's like comparing cost of labor in California vs Mexico
@@xen.7140 As far as I know, the labor cost in India is much lower than that in China. But I don't see the goods made in India selling all over the world. VW's factory in China employs the same Chinese workers (not German workers), but their sales are declining.
@@jogana6909 India is a completely different story. India has it's own developed business process offsourcing industries like call centres that companies frequently use due to very low cost of labor. Even large companies like PayPal have most of their customer service in India. You wouldn't build call centres in Germany where the average pre-tax salary is 3000 euro. VW's sales would be declining even if 100% of their factories were in China. In fact, they just recently sold a factory in China. The issue is much larger than that and has to do with unprofitability of their factories. As referenced in the video, it costs VW a lot more to build a car than other manufacturers (about 3 times as much on average). VW employees are more costly than even Porsche and Audi on average, and there's over 100,000 of them. This was not an issue while car sales were at an all-time high a few years ago. The decrease in sales is also largely due to high leasing rates at the moment, car sales are significantly lower than they were in many years and at the same time VW is suffering losses in billions + having to outcompete Chinese manufacturers who are arguably operating at a loss.
Still buy an old petrol car over electric, I am considering solar panels when we have our roof redone just as money saving but then again I can invest that £10k and probably make more on return that'll cover bills
I find those German salaries unreal! I grew up in a GM town in the UK, so most everyone I knew worked for Vauxhall at one time or another. The few people I know who still work on the shop floor there make the equivalent of about 35k Euro's.
A socialist cannot understand second order effects. Jailing a career criminal saves millions in reduced insurance premiums, reduced security expenditure, greater business because of safer streets, etc.
I suppose it should be a margin decision, which work structures are best aligned with adjusted margins in a non combustion environment. And I'm sure automation play a role here right?
If VW focuses their traditional customers with reasonably priced cars they wouldn’t have any wage issues. But a Golf for north of 30k€ isn’t the bread’n’butter car the market requires. And brand credibility still suffers from Dieselgate
Even if they focused on cheap cars, none of them would be made in Germany. The Polo is made in Portugal or Spain, the Up! was made in Slovakia, nothing below the Golf can be made in germany unless fully automated and gigacast, which the unions will fight tooth and nail until their last breath
Wage costs are not the important measure. Productivity is the important measure. If someone costs twice as much as someone else but is 3 times as productive, then the more expensive employee is actually cheaper in terms of efficiency.
But what's the point of a European worker being 3x more productive if, say, the product they're making costs 2x more to make and sells for almost 3x the price of similarly based product that is being made in China and is selling in higher volumes anyway? The whole math involved isn't that straightforward, it's not as simple as 3X1 > 2x1!
When you compare European production costs to those of the Chinese, are you taking into account the different levels of effective subsidy that may be coming from government to their manufacturing industries?
Works Councils have contributed greatly to the decline in reliability of German autos. Engineers have been required to design cars to reduce labor in absurd ways. The German marks have sustained interior plushness and quality, but buyers can't expect German brands to go further than 120,000 miles before major mechanical failure making it more practical to scrap and buy new than to make expensive repairs. Another factor is the insane pressure to improve fuel economy forcing all cars to design dual turbo chargers on little 2 liter engines to push out 300 plus horse power. The metals cannot take strain and are doomed to fail earlier that the older designs.
I’d like to know how Farley comes up with the average employee cost of $300K. I read contract negotiations reports in the NYT and typically saw hourly costs in the $25-40 hr range.
Whoever closes, please open in Thailand, the Thai car market still has some places for affordable "real European brand" cars/EVs, for people that want to avoiding Chinese EVs.
If my company was $190+ billion dollars in debt and wage costs in Germany were twice as high as in factories elsewhere in the world, I would close all my factories in Germany or face going bust, which is what is happening to VW. In 2008 the world had the banking crisis, in Germany in 2024 they have the automobile manufacturing crisis. The lesson for VW is compete don't cheat. I fear it maybe all too late now. The other problem is with governments playing fast and loose with their economies, printing money during the aforementioned banking crisis and the pandemic, devaluing their currencies and dragging many people into a cost of living crisis, something's got to give.
We work at a sanding company and deliver Auto parts to these companies perfect for painting, and our company pays us 14 to18 euros per hour.... We talking about different Germany or what!!!
Yes, they could compete on quality and safety or performance. But for some unknown reason the germans are obsessed of making unrealiable cars. Not only that VW probably sits on a huge loss from the dieselgate scandal that new costumers are paying for. or to make the cars competitive in terms of prices VW pays for running at loss.
Do you truly believe that Volkswagen is a brand that doesn't need to compete on price? Their cars need to come down in price by about 30% to be reasonable propositions.
Yes, learning to code is not practical for most factory workers. However, "learn to code" can be shorthand for looking to the future and finding another skill.
Hey Sam, I like your reports, but a bit more research is necessary on your part. Simply comparing wage figures is naive, as the cost of living here in Germany is quite high. Why is that? It's mainly due to taxes, fees, and legal requirements. We're practically the only country in Europe contributing significantly, with actually three countries paying in, but Germany contributes twice as much as the other two combined. Our pension age is the highest in Europe, yet our pensions are amongst the lowest. The real cost isn't the workers themselves, but rather all the expenses required to keep the EU together. It's no wonder things are the way they are. To make matters worse, political decisions over the last two decades have further increased these spiraling costs for questionable causes. So, what you're comparing isn't merely wages; in reality, you're comparing how much hardship workers in different countries endure to maintain a relatively comparable standard of living. In the last 20 to 25 years, no investments in infrastructure have been made in Germany because all the money was redirected to other EU and non-EU countries. I can see this when I travel to places like Poland or Spain, and it's evident. Germany has been stagnant at best. Yes, Germany is shutting down, but wages are just an effect, not the cause. Misaligned strategies, wrong priorities, and a lack of vision will eventually lead to the demise of the EU.
Well if labour is 10-20% of the manufacturing cost its still possible to compete if you have other advantages like stability, material costs, energy costs, brand loyalty, locality, tariffs, IP etc. Sadly Europe is losing grounds on multiple dimensions.
I think you make one mistake in your labor cost calculation: all the vastly overpaid managers reside in German factories. Doesn't reflect on factory workers. I know for sure that common workers in Germany don't earn 80EUR per hour.
@@HaraldinChina Typically, they are not counted as labor in this kind of studies. But even if they did, they are not part of an union. Instead, they are part of a somewhat freer labor market that matches supply with demand. Therefore, there's no such thing as "overpaid" for managers as it's the labor market that determines their price. Of course, Germany has the general problem of an overly regulated labor market that indeed inflates the cost of a manager as well, just to a less degree.
@@wgemini4422 they are calculated into the average labor cost per car, which is total wage and bonus payment, divided by number of cars produced. That was my point. I don't share your belief in a magical market with an invisible hand of god helping to set prices. Top managers have market power, by intimately knowing the investors, that's how they set their own salaries. For investors it's the choice between searching new C-suite managers or accepting their exorbitant salaries. Unions are the attempt to increase negotiation power for the workers, which is legitimate in a free market.
The price of there new vans are off the charts. Over 50 thousand including vat here in Ireland. Hard for people to buy vans when they’re this high . It’s not sustainable
European here, many Eastern Europeans works in those factories for around 2000 euros, three to four shifts day and night. Buying EV in Europe is financial disaster compared to gas it is 1X higher to run and if you compare to diesel it is 2X. Prices of EVs from China or Europe is almost the same, but Europeans did the math and realized that EV are luxury lifestyle products for rich
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I can see a lot of Germans coping in the comments how net salary is much smaller actually, how rent and groceries are larger than in China, how German cars are better quality etc. IT DOES NOT MATTER!!! If there is no market, no buyers then it does not matter. One of the first thing I learned as an entrepreneur is don't create a product nobody wants to buy.
Now you not working with bare hands- mashines not people are making machines
Plenty of people want to buy German cars. Sounds like you're a horrible entrepreneur
Nobody is talking about FIRE (finance, insurance, real estate) sector eating everyone's lunch. And taxes. In Germany as in much of Europe, the state takes 50% of your gross income. And then from what's left you pay 30-50% for your apartment rent or credit. And let's not forget Germany's suicidal energy policies. This is what is destroying the Western industry. Most of the industries in Europe, especially those which consume a lot of energy will go the VW path. Bankruptcy. That's what happens when you have idiots and quislings in charge.
很多人买，就不会关厂了@@thewolf9851
@@thewolf9851 You are commenting under a video about Volkswagen's big problems with selling cars that are forcing it to close several factories in Germany. Just saying.
Did it to themselves VW went from the “people’s car” to cars for certain people.
Indeed. It's not enough to have it in the brand name! The actual product needs to realize the idea too.
In China VW cars are only popular with old people....😂
Vw had all the time in the world to take corrective measures and safeguard their own future, and have nobody to blame for their mess apart from themselves.
@@future_horizon Perhaps it's because only old people have enough money to buy them expensive cars?
who are these certain people?
My father was a cash register repairman in the 1960’s. He saw the handwriting on the wall when transistors started replacing mechanical parts. He moved the family to NCR headquarters in Dayton and was retrained as a coder. But he was virtually the only one; everyone else lost their jobs. The company shriveled to from a large conglomerate competing with IBM across product lines to a niche brand making ATMs.
@@donaldbucher472 we been sending iff and on?
With AI, everyone will be at the situation your father faced back then.
Where to move?
Your father was very smart , and it took a lot of courage to quit his job and relocate his family.
The difference Is the EV transition is being pushed by the governments not by consumers
@@JDMSwervo2001which industries do you think haven’t been pushed by governments…
7:25 "Labor cost in Germany are 79 E/hr, that's like getting PAID 150 $/hr in Australia". Not exactly PAID 150/hr. Keep in mind, labor cost include all the benefits like insurance, pension etcetera. Workers are not getting 79/hr in their pay check, the TOTAL labor cost includes the wage plus everything else. Love your channel, sir keep up the great work!
😂😂😂😂
They will go to get 0,00, looks like there is zero hope for any industry inside Germany
exactly, "cost" and "hourly pay" is not the same thing.
Sam, you don't even know what gross and net income is.
Your statement about what German workers earn is incorrect since you confuse gross with net...and even from net there are going off 19% and 9% of VAT...not to forget that inflation is being used so tgat people spend instead of save their money.
@@thyristo vat on wages ?
This is where British Leyland / Austin Rover / Morris / etc were in the 1970s and 80s. There is nothing left of them today.
And they made real cars many actually wanted to buy!
@@G-ra-ha-m Only if they were crazy, they were terrible quality. Perhaps you are joking.
@@paulc6766 Yes, quality was terrible - but the fundamentals were better than, as people were buying the type of cars they were making :)
Today everyone makes huge expensive cars that go wrong, or are simply unsuitable for various reasons - that no one can afford !
They were shite TBH @@G-ra-ha-m
@@Greggspies Haha, I know, I was there - the Allegro, the Montego, The Marina - horrors. Then the car that was supposed to save it - The Metro, a car that wore out its suspension faster than it's strange looks :D
The 'Gernan Engineering' myth is over, they have to face the consequence of high labor cost, dated technology, lack of factory investment, bad management, etc.
The real problems are high energy costs due to the stupidity of closing nuclear power down and the loss of cheap gas from Russia together with lack of demand for electric cars they are committed to produce. All self-inflicted issues resulting from left wing government policies.
It WAS real. Made in Germany,..... Long time ago.
Indeed this slogan is a myth. Just got karcher vacuum cleaner and something that never saw happening with any vacuums in the past happened with karcher, supposedly German engineering and manufacturing - suction pipe broke within 4 weeks whilst vacuuming carpet
why do you not simply accept it is the EU making. W/o the GD and induced electrification, people would have continue to afford new cars and companies would still be manufacturing them. They broke everyone, and it's extremely likely they knew what they were doing. So it is politics, not engineering that busted the myth.
Not to mention high energy costs after the morons sanctioned their main energy supplier
Having lived in Germany and worked in the auto industry there, in previous downturns, the industry would kick and scream but eventually make the necessary changes to make the cars more competitive with Asian brands. Adding Air conditioning, cup holders or electric windows as standard, for example. Fairly easy stuff although it always took a crisis for something to happen. Labour strikes would largely be avoided by increasing wages and/or cutting hours, keeping the workforce intact (hardly ever any layoffs). Now, there are fundamental changes in vehicle manufacturing and German companies were asleep at the wheel. I'm not sure they can catch up this time.
They are all being forced to make cars no one will ever want to buy.. it's game over.
so tell us. is the labor cost real? 130k per employee? sounds a little high for a line worker. sounds like they are lumping in the high paid office people.
This sounds to me like the Nokia's downfall when smartphones hit the mass market...
@@Mike-Minion probably they also calculated the C-level salaries and those pull up the average but even with 50% tax, I don't think an assembly worker gets home with 6k every month after tax.
Asleep, no. They willingly chose to pursue electrification unilaterally at domestic locations. ID.4 in US is riddled with problems the dealers can't fix. Too fast in retrospect. Might not be savable by Mexican labor advantage alone. Big headaches ahead for 10-years at least.
Factory costs got out of hand in Australia. Now we don't make any cars...
Sorry VW and others, you literally trained an entire Chinese workforce how to make cars over the last 20 years, what did you think was going to happen?
VW and others made billions each year from Chinese market . BTW , Chinese firms invested in EV while the rest of the world did nothing .
Tell the EU to stop funding wars n following the footsteps of the United States of Amnesia.....😉😉😉
@@jessicayoung1190 Tesla invested in BEVs. WTF are you talking about the rest of the world did nothing?
@@KP-xi4bj Tesla is only one company . What happened to the rest ? Tesla can only survives in the west due to tariffs put on Chinese EV --EM .
@@jessicayoung1190 Telsa is one company that sells the most BEVs in the world. In fact, it is outselling BYD BEVs in China where BYD is heavily subsidized by the CCP. That's saying a lot.
Thanks
🇩🇪 for decades have been making mediocre cars and sold at a hefty premium because of the myth of superior engineering and quality. Like 🇯🇵 they have had it too good for too long. About time 👎
You sir, are right on. Overrated, overpriced cars
Even if it's better doesn't mean it's necessary or that people can afford the extra cost. Sometimes the best seller isn't the best product it's just the best combination of price and functionality
I'd say this is true for everything. You can make the best car in the world but if it is too expensive nobody will buy it.
you probably drive a Corolla. In your case, you'd probably be happy also with a downgrade to a Chinese EV.
@@robertpsotka3525 Especially Porsche. The 356 was affordable. Nothing they make now is.
No need to fight ...all will be close. Just matter of time.
Dream about that
No they won't 😂
VW is going to be bailed out by Germany. EU will think of an excuse to allow it, because it's Germany. VW has been jobs program for decades, this is just natural outcome.
Some of the highest wages for assembly workers in the UK were Ford engine assembly in Bridgend, South Wales. When the plant closed I did heard the redundancy package was over 200k for long term employees
My friends son works at FORDS electric development department, and they are absolutely Shitting themselves because they are so far behind, no joke.
who cares about EVs except China ?
In addition to this they have a 35-hour-work-week at VW, Audi and BMW.
As you said, 7000 per vehicle in Germany vs China less than 2000, in worst case scenario that is 5500 more cost per vehicle. Still there is no explanation why same car in Europe is 20000 more costly than in China (taking here about VW vehicles, not imported ones).
Really explains alot why you ask that… a german car against a car made in china… if you cant think why the china car is cheaper you need to go back to school… oh me us here in the UK are fooked if this is what you all think! Thick as…
I would guess Energy and resources cost way more in Germany, as well as all the development costs driven higher by ever stricter regulations and bureaucracy. Like the UNECE rules, although china has similar laws as well
The downfall of Volkswagen was absolutely inevitable. VW was known for extremely reliable and extremely well engineered cars with a timeless styling and without much "bling". Because of that a lot of people were willing to pay a bit more money for their cars.
Building such cars is impossible today because all those ridiculous regulations literally ban those cars.
Beeping and blinking plastic crap can be made cheaper elsewhere.
Oh my goodness , it needs to take decisive action to survive and while no one can agree the ship is busy sinking 🤦🏻♂️
Before the ship sinks, it is still necessary to divide the money.
Not surprised tesla don't want anything to do with any union
Yeah but that's not because tesla offers its workers enough job loyalty protection... Musk is just evil. Billionaires don't like normal workers - they just use them and throw them away. Workers do need protections from fiends like that - union or not.
most tesla workers have stocks and already millionaires, so why join union and let union boss steal your hard earn money
Musk hates unions because he is a dictator. Like Trump...
Most pf the Tesla workers will be sacked out soon. Elon will replace them with Tesla robots.
That's right -- because unions are the real enemy of average people -- not billionaires who are getting richer and richer while everyone struggles. 😂🤣😆
In China a Golf costs 20k, in Germany 38k. There are 39 VW factories in China, 10 VW factories in Germany. Maybe VW needs to sell Chinese Golfs around the world??
Close the factories in china instead or change their pay to match europes.
I'm sure vw top execs are all humane to do so ...@@Alexander-z6x
Its was only working because most of the costs of a car production its done by suppliers with average salarys, not with 80-130k€
All of Germany is high cost, not just automotive. The outcome of this is obvious to anybody that has any sense. Both German management and the employees/Unions are ignoring reality.
That works if they are also high productivity, but they are not compared to many global brands now.
@@ISuperTed It's not just automotive, there isn't a single industry where EU products can be competitive and that's because of the EU legislation. You can't go net zero in Europe, while the rest of the World is not playing by the same set of rules. In communist environments, Ideology rules over business and common sense, then sooner or later, everything falls apart.
@@mirceaalexandru400 Maybe, but by then the Western car industry will be dead.
@@mirceaalexandru400 In communist China they are building more atomic energy. They are buying more cheap, clean reliable natural gas. They are building and innovating EVs like no other country. The Chinese communist government actually cares about economic growth. The EU unelected bureaurcrats do not, they care about power. Total, uncontested, unquestioned, power.
Remember, "denial" ain't just a river in Egypt.
😂😂😂😂😂
Sam, your vids are full of info. That's hard for some doing things the old way. But we still strive to show a more efficient and clean. Thanks blessings to your family 🙏🙏💗
This was the same in Australia, union made wages unsustainable and the car industry shut down. Now we get cheap cars.
German car makers are experiencing what British shipbuilders went through decades ago. At the end of the 19th century, Britain produced the majority of the world’s ships, nowadays we make only a tiny fraction as our cost base is huge compared to the Chinese, Koreans etc….there’s no going back to the glory days for German auto makers, they’re all toast!
My understanding is that the second largest shareholder in VW, after the Porsche/Piech family, is the German state of Lower Saxony. I believe that is the reason the union has been invulnerable up to this point. Interesting times. Thanks for your insight Sam.
also worth noting lower saxony once owned 100% of vw after henry ford and rover and gm refused to be given the company by the british government but they had to pay out royalties largely in shares for the design of the beetle to the porsche family and then the young ferry porsche wanted vw to make a special coupe version of the beetle and vw invested in him to start porsche. then daddy ferdinand porsche got out of prison for crimes against humanity in his part in the holocaust and took over porsche management for his death.
German workers have civil rights, health care, holidays etc etc What consumers need to learn is to support their own citizens and pay a little extra to buy local. Not only do you support the car manufacturers but all the allied industries that supply them, the people who feed and house them as well as the national services they support with their taxes. Buying cheap imports simply shifts large chunks of your economy overseas.
Correct, in these other countries they turn up for work and are told they are not needed today, or even no longer required. No redundancy pay or 28 days of consultation. Also when busy, they can unexpectedly be told to stay late for hours just as they expect to go home. etc..
Stay on Strike, ain’t paying a cent over $€£30,000 for a High Performance EV. New World or None, 0 f’s given for Entitlement.
I sure couldn't care less about the entitlement of being an early adopter of a +$€40,000 EV if that's all they're willing to ultimately trying to sell...
It sounds as if some workers in Germany are in for a shock - soon.
they don't want factories to close but yet they are outside NOT working
Yep, biting the hand that feeds them.
What does a German CEO make compared to a Chinese CEO?
Who cares? A pimple on the arse of an elephant….
Just refer to them as Deutsche Leyland so they can understand what's going to happen. I'm a doctor in South Africa, drove German and English cars for decades but since 2021, Chinese, we're extremely satisfied. The first time I saw a Chinese car get a five star safety rating I said the game is over.
Have a look at new Mahindra EVs
If they bring a replacement for Toyota, is over in Southern Africa
Indian people need to know 1000% more about today'China and Chinese products before they give some advices. 😊@@Fiction_IN
I wouldn’t want to drive any of their cars. The 2 VW’s I did own, the plastic in them cars deteriorated at 8 years old. The cars are crap. This morning I’m driving my kids to school and can’t wait to get in the Tesla…
Tesla is a very fun car to drive
In the UK there are 11 million of us without work, so not suprising that we can't afford any new car, Chinese, German whatever, Ill keep my 20 year old Rover 75 which will see me out. The Germans have had it easy too long dominating the market in the UK and EU. Now its changing
Errr - 1.5million registered unemployed in the UK. Maybe about 10 million leisure class without work..?
@@Julian_Wang-paiHe means 11M that are not working, not are unemployed. However he’s implying that there are 11M that could be working, which there aren’t. As you say it’s 1.5M registered.
Any serious public company that is facing this type of structural challenge immediately suspends their dividend. You can't afford to eject cash from the business when they desperately need to restructure.
Cutting the dividend won't do a whole lot for you if the competition's cost structure is far lower than yours.
It's more of a nice gesture more than anything else.
All the non VW divisions are profitable. Those divisions can pay a dividend. The VW division needs to be restructured to be profitable, and shareholders shouldn't have to just funnel money from Lambo, Audi, Ducati, Porsche and Bentley to support inefficient VW.
@@JustinTipton China has lower labor costs, programs to help their auto companies to get started and grow plus a currency that gives them an edge in international sales.
No matter how efficient VW can become, they still have other hurdles to deal with. Maybe Germany can insist the Chinese battery makers set up shop in Germany?
@@AQuietNightlol, what leverage does Germany have to insist on anything? 😅 They are in the EU, the Chinese can set up shop in Romania or Bulgaria and there is nothing that Germany can do about it
@@HNedel That would make it an EU problem.
They are not dying out because they lost the EV competition with China. They are dying because regardless of EV or ICE, they produce expensive vehicles for bad quality and poor reliability. The labours at these factories don't understand that their salaries are super inflated compared to the other countries. Today they are asking for a raise while the factories are going to close down.
When you're poor, invest in your education and skillset. Celebrating somebody else's trouble is a sign of precarious education.
Legacy auto company factories *are* being closed down as petrol cars are utterly obsolete compared to EVs. Apart from Tesla, no one can make EVs as good as the Chinese.
This is the heart of the matter. 🐼 🇨🇳
My daughter bought a Passat!
What a merciless money-pit!
The VW mechanic couldn't turn a corner without charging a $1,000!
Minimum salary in Portugal: 870€ GErmany: € 1.985,60
The car industry is heavily robotized, so the main cost is not the workers but the material (supply channels), infrastructure and electricity.
It's not even that high in The Netherlands. And we have a fairly good economy. Our minimum wage is around 1200 euro. It is also aged based, so the older you are the higher your minimum wage. It scales by law, but Germany seems like an outlier
And why is it so high? Renting prices are going through the roof and taxes are insane. Except for rich people who pay way less taxes. Sounds familiar, right? Germany needs a lot of restructuring… but no one wants to change anything. And so we keep the system running as is until it crashes.
You need people to have money to generate growth.
It's an age old dilemma and looks like ECB with too tight monetary policy is the root cause.
I don't think Germany has a minimum salary by law. That kind of abomination is more common in southern European countries.
I live close to Wolfsburg and have unfortunately to admit that often times VW offered unusual higher salaries than normal level in the region. Plus the work volume is often time even less. So lot of companies lost good trained people to VW which overpaid them. Now it seems VW gets the invoice for that exaggerated payment behaviour!
Those are the results of the "Energiewende" in Germany. They do not want to compare their salaries with the world 🤣 - funny
thank Frau Angela for shutting down all nuclear plants. You now have the most expensive energy in Europe. Who would have guessed high electricity prices can bankrupt businesses.
@@mirceaalexandru400 Some say she is a moron
The living costs in west Europe (I'm Danish)are very very high and so are the taxation.
Not as high as in the US (rent and healthcare) and the taxation is not that much higher
@@michalandrejmolnar3715 yep, gas it's only 3x (three times) more expensive in Germany than in the US. If you go further North, the difference is even bigger.
@@michalandrejmolnar3715 US cost of living is actually not that high among all the Western Nations. It is only High in Cities like New York City and State of California.
They sound like Holden Australia when they were forced to shut down because their outrageous costs
sounds like everyone in the German auto industry can take a %15 haircut and not miss a beat (especially after taxes) ,and yet here they are bickering . but, if blame was to be shared, I give 70% to management (and the shareholders). They are the ones who are supposed to see this coming and plan for it. They got rid of people who tried to warn them
That's just the point, management often DOES see the problems but are powerless to make any changes for fear of being replaced.
@@markdc1145 spot on. If they don't play the game, they get immediately replaced.
Many western economies are at the same crossroad. Corrupted labor union involvement is outdated and ludicrous in high wage countries such as Germany ,Australia etc where they are striking even though they already have 6 figure salaries for basic labor.
No decision at board level can go through without votes from union representatives and the local government which owns 20% of shares. The high costs have been an issue for a long time, but were being covered by profits from abroad, especially China. The workers in Germany are basically on strike to be subsidized by workers in Poland, Slovakia, Portugal and China
There are experienced, college educated programmers looking for jobs. Good luck to a factory worker finding a programming job after they “learn to code.”
Learning to code is overrated. Here in Netherlands l, the workforce needs more blue collar repair craftsman. Electrical, plumbing, construction. They are good paying jobs too. You're welcome.
I am afraid that the work of IT specialists and programmers will become unnecessary in 90 percent of cases. This is a fact. Artificial intelligence will lead to their dismissal. The professions of the future are: plumber, bricklayer, etc.
Why would a factory worker want a programming job?
@@thewolf9851 To survive financially and materially after he loses his factory job.
@@paweszczepaniak8238 Correct
VW assembly line worker gets about 48k gross per year before taxes, wihout bonuses
In Poland, the average salary in the industry (gross cost to the employer) is EUR 2.5 thousand per month, which means EUR 30 thousand per year.
The cost of living in Germany and Europe is through the roof. We’re being screwed over on energy and food as the governments impose draconian green taxes.
Meanwhile, china opens 100 coal power stations a year.
When I visited china there is no health and safety industry. That’s not saying it’s bad we have it in Europe but you can see how it adds to the costs. I watched people in a brand new airport fixing glass panels in by standing ion their tool boxes on a luggage trolly. It’s so much cheaper to do things in china when life has no value
It’s all to do with the bloated economy and too many middle managers.
Cost of living in Europe is equal to the services they receive. Free healthcare. Free college. High quality of life with little suffering or hard work. Energy costs and food prices are reasonable for a population that doesn’t really need much
When cars run into issues with quality and then couple that with higher costs, customers go elsewhere and may never return to the brand.
In the meantime dividends of €5 billion are being sucked out of the company every year.
I agree, you don't compete, You cooperate. You form joint ventures, and you make the auto’s in Europe and America together with Chinese firms. Both the USA and Europe are threatened by the new technologies and have sought protection. They have this in common.
Cooperation as the EU has demonstrated is the way to bring people together to achieve higher levels of attainment that you cannot do on your own. Yes, it is not easy. There will be huge change and disruption as you move to a win-win outcome. Something to think about.
Daily Tea and Biscuits
Annual 3 months vacations
30 Hours work week
In the US dock workers even refuse automation
for now.
Cost of labour wages. There are very high overheads per employee in Germany, aside from the wages - though i'd expect these are also higher than neighbouring countries, but not double,
Reminds me of the dying days of the british car industry in the 70s.
Except the German industry will come back stronger than ever
Time will tell😊@@thewolf9851
@thewolf9851 I assume the British thought that also.
@@thewolf9851There are multiple Big Markets now. China, Mexico , Vietnam, thailand, India are all low cost markets that have capability to develop their own cars.
@StephenButlerOne I don't know or care about what the British though. I am neither British nor German.
How could you look at all that data and not include a major increase in energy costs now that Germany decided it didn’t want cheap Russian energy? All that machinery in those factories consume massive amounts of energy that is about four times the cost currently than it was. This is probably much more of an issue than labor cost.
Absolutely this, and while people rave on about EVs and all this China is the new king, the vast majority of the energy in China is derived from coal fired power stations running on Aussie coal. Don’t buy an EV, you are killing the planet.
Labour costs at the factory where cars are put together only accounts for about 5%. It'll affect the price by a couple 1000 for sure. But bad management is the real reason they will be going under, not labour costs.
Bad innovation management. This is a textbook example of innovators taking over the industry
Hello - podcaster data from Germany saying is $7000 per car for those in Germany. Your figure of 1000. - where data from and what country?
@michael-qp9xd We are talking price difference between China and Germany, not labour cost per vehicle.
He stated in this video it was 2-3k in China for labour and 7k in Germany. A 5k difference. Viking also stated in other videos that VW takes 3-4 times as long to put out a car like the ID4 as Tesla does with the model Y, and that Geely are at equal to or a little more ×1.5 Tesla's time. Those are work hours put into the car.
Best case scenario is that VW takes x3 as long to put a car together. 7k/3=2.3k per car. Let's say that while China puts out a car three times faster, their labour isn't 3 times less. But there has to be some lack of efficiency in labour on top of the time to assemble. 2.3k vs 2k is probably not right, and it is probably 3-4k vs China's 2k if they can reduce time to assemble every vehicle.
The Chinese model of car building is about efficiency, and that is where they are winning. So while Ford and Mercedes leave Brazil, BYD and Great Wall move in and build in Brazil and gobble up market share. Same labour costs, just a change in vehicles, vehicle types, and efficiency.
Management rarely takes responsibility for its inadequacies, and labour costs is always the escape goat. We have seen this time and time again.
Energy costs mainly.
And now energy costs in Germany due to sanctions ... the cheap gas that used to go to Germany is now headed to China. Go figure!
Even if VW could snap their collective fingers and lower the cost of production they would still keep prices to the consumer high correct??
Bless you m8 for just spitting facts. My thoughts are with you and your family 😊
😂😂😂😂😂😂😂
At least people in Germany dont live in poverty, and they still have all their human rights.
As soon as the EV mandates are lifted, they should recover just fine.
I don't understand what cost for labor means. Does it include only people who are involved in assembly?
Does it include R&D?
Does it include management cost?
Great content Sam, keep it coming
The Viking is spot on, he talks facts and not emotion or nationalism.The game us up for the once great german auto industry,as we found out in britain in the 70s.Face the facts and move on,it is not the end of the world.
Just a question to clarify- is the production cost comparing ic with ic or ic with ev?
In Germany the cost for employers are much higher per employee, this is called Lohnnebenkosten.
The average worker gets (before taxes) Most likely less than 40 Euros per hour.
The 1xx Euro per hour seems like Accounting shenanigans.
Exactly this, cost of labor is cheap in China and high in Germany. This isn't surprising at all. It's like comparing cost of labor in California vs Mexico
@@xen.7140
As far as I know, the labor cost in India is much lower than that in China.
But I don't see the goods made in India selling all over the world.
VW's factory in China employs the same Chinese workers (not German workers), but their sales are declining.
No, it is management and bureaucracy overhead.
@@jogana6909 India is a completely different story. India has it's own developed business process offsourcing industries like call centres that companies frequently use due to very low cost of labor. Even large companies like PayPal have most of their customer service in India. You wouldn't build call centres in Germany where the average pre-tax salary is 3000 euro.
VW's sales would be declining even if 100% of their factories were in China. In fact, they just recently sold a factory in China. The issue is much larger than that and has to do with unprofitability of their factories. As referenced in the video, it costs VW a lot more to build a car than other manufacturers (about 3 times as much on average). VW employees are more costly than even Porsche and Audi on average, and there's over 100,000 of them. This was not an issue while car sales were at an all-time high a few years ago. The decrease in sales is also largely due to high leasing rates at the moment, car sales are significantly lower than they were in many years and at the same time VW is suffering losses in billions + having to outcompete Chinese manufacturers who are arguably operating at a loss.
@@joergmaass it's energy prices. Check you energy bill. Check the gas price. Compare them with the US for instance.
Still buy an old petrol car over electric, I am considering solar panels when we have our roof redone just as money saving but then again I can invest that £10k and probably make more on return that'll cover bills
I find those German salaries unreal! I grew up in a GM town in the UK, so most everyone I knew worked for Vauxhall at one time or another. The few people I know who still work on the shop floor there make the equivalent of about 35k Euro's.
That $125k/year reminds of crazy stat from 1990s: costs more to jail people in US than send to Harvard.
(Why Repubs wanna privatize &... capitalize).
It is expensive to put a person into captivity. Why would it be cheaper to go to classes at a school?
@CombatSport777 Not a "a school", *Harvard.* In US - with more people jailed than any other nation - "expensive" is about to = (more) *PROFITABLE* 🤑.
wrr
A socialist cannot understand second order effects. Jailing a career criminal saves millions in reduced insurance premiums, reduced security expenditure, greater business because of safer streets, etc.
What about all the components costs? Where are the various components made?
creativity is in demand, not process which is executed elsewhere
I suppose it should be a margin decision, which work structures are best aligned with adjusted margins in a non combustion environment. And I'm sure automation play a role here right?
If VW focuses their traditional customers with reasonably priced cars they wouldn’t have any wage issues. But a Golf for north of 30k€ isn’t the bread’n’butter car the market requires. And brand credibility still suffers from Dieselgate
Even if they focused on cheap cars, none of them would be made in Germany. The Polo is made in Portugal or Spain, the Up! was made in Slovakia, nothing below the Golf can be made in germany unless fully automated and gigacast, which the unions will fight tooth and nail until their last breath
Wage costs are not the important measure. Productivity is the important measure. If someone costs twice as much as someone else but is 3 times as productive, then the more expensive employee is actually cheaper in terms of efficiency.
Facts.
Sure but where’s the productivity?
Assuming that the lower cost of workers are not as productive as higher cost of workers.
But what's the point of a European worker being 3x more productive if, say, the product they're making costs 2x more to make and sells for almost 3x the price of similarly based product that is being made in China and is selling in higher volumes anyway?
The whole math involved isn't that straightforward, it's not as simple as 3X1 > 2x1!
Yes, but they don't have good productivity. It takes three times longer to make VW ID3 than making a Tesla model 3.
When you compare European production costs to those of the Chinese, are you taking into account the different levels of effective subsidy that may be coming from government to their manufacturing industries?
Works Councils have contributed greatly to the decline in reliability of German autos. Engineers have been required to design cars to reduce labor in absurd ways. The German marks have sustained interior plushness and quality, but buyers can't expect German brands to go further than 120,000 miles before major mechanical failure making it more practical to scrap and buy new than to make expensive repairs. Another factor is the insane pressure to improve fuel economy forcing all cars to design dual turbo chargers on little 2 liter engines to push out 300 plus horse power. The metals cannot take strain and are doomed to fail earlier that the older designs.
I’d like to know how Farley comes up with the average employee cost of $300K. I read contract negotiations reports in the NYT and typically saw hourly costs in the $25-40 hr range.
Whoever closes, please open in Thailand, the Thai car market still has some places for affordable "real European brand" cars/EVs, for people that want to avoiding Chinese EVs.
I don't think that most Thai's are as anti-Chinese as you are.
@@paulc6766- actually they are, and many Thai are decidingly anti-EV.
If my company was $190+ billion dollars in debt and wage costs in Germany were twice as high as in factories elsewhere in the world, I would close all my factories in Germany or face going bust, which is what is happening to VW. In 2008 the world had the banking crisis, in Germany in 2024 they have the automobile manufacturing crisis. The lesson for VW is compete don't cheat. I fear it maybe all too late now. The other problem is with governments playing fast and loose with their economies, printing money during the aforementioned banking crisis and the pandemic, devaluing their currencies and dragging many people into a cost of living crisis, something's got to give.
We work at a sanding company and deliver Auto parts to these companies perfect for painting, and our company pays us 14 to18 euros per hour.... We talking about different Germany or what!!!
And if your boss wanted to fire you, how much they have to pay the lawyers? You cost your company a lot more than your salary.
@wgemini4422 with this salary every boss is happy lol, and he never fire anyone...what you talking about
@@ioannisdousmanis4025 I am talking about labor cost is a lot higher than your salary.
15 euros per hour is about the lower bound of an "okay for a normal life" wage...
@@hyhhy There's no definition of "a normal life".
You don't have to compete on price. That's only a race to the bottom.
but you do have to compete on value for money.
Yes, they could compete on quality and safety or performance. But for some unknown reason the germans are obsessed of making unrealiable cars.
Not only that VW probably sits on a huge loss from the dieselgate scandal that new costumers are paying for. or to make the cars competitive in terms of prices VW pays for running at loss.
Do you truly believe that Volkswagen is a brand that doesn't need to compete on price? Their cars need to come down in price by about 30% to be reasonable propositions.
Deals need to be done between Management and Unions.
Thank you.
argueing? both have same Ceo‘s
Love it, you can retrain, start a RUclips channel, that's priceless 😂
Great opportunity to bring in the robots.
Not when the unions have to approve any such measures 😅
Electric V, when you said "learn to code" as part of retraining, that's not practical for most people
Yes, learning to code is not practical for most factory workers. However, "learn to code" can be shorthand for looking to the future and finding another skill.
And the % contribution of labor to production is??????😢
one thing i dont understand, the prices of vws have almost doubled in the past 5 years, how come they have no profit???
Depends how expensive your product is and 7k€ matters or not as a production price for a car.
Hey Sam,
I like your reports, but a bit more research is necessary on your part. Simply comparing wage figures is naive, as the cost of living here in Germany is quite high. Why is that? It's mainly due to taxes, fees, and legal requirements. We're practically the only country in Europe contributing significantly, with actually three countries paying in, but Germany contributes twice as much as the other two combined.
Our pension age is the highest in Europe, yet our pensions are amongst the lowest. The real cost isn't the workers themselves, but rather all the expenses required to keep the EU together. It's no wonder things are the way they are. To make matters worse, political decisions over the last two decades have further increased these spiraling costs for questionable causes.
So, what you're comparing isn't merely wages; in reality, you're comparing how much hardship workers in different countries endure to maintain a relatively comparable standard of living. In the last 20 to 25 years, no investments in infrastructure have been made in Germany because all the money was redirected to other EU and non-EU countries. I can see this when I travel to places like Poland or Spain, and it's evident. Germany has been stagnant at best.
Yes, Germany is shutting down, but wages are just an effect, not the cause. Misaligned strategies, wrong priorities, and a lack of vision will eventually lead to the demise of the EU.
What is most staggering is also the cost to develop car and implement new models in China is like 80% cheaper
Overpriced cars, even the entry level car needs to cost 50% less if the want to complete
I looked it up a few days ago: Smallest VW 20k, and the smallest BYD 15k (with some temporary rebate, I think). Not 50%.
I still want to see VW reformed and saved!
You want to renovate the house - not burn it to the ground!
What would you recommend Mr. Viking?
Plus the huge legacy costs for the US companies.
Well if labour is 10-20% of the manufacturing cost its still possible to compete if you have other advantages like stability, material costs, energy costs, brand loyalty, locality, tariffs, IP etc. Sadly Europe is losing grounds on multiple dimensions.
Come on does it really matter, Germany won't go broke! It's not as though anyone will run out of cars! 😊
I think you make one mistake in your labor cost calculation: all the vastly overpaid managers reside in German factories. Doesn't reflect on factory workers. I know for sure that common workers in Germany don't earn 80EUR per hour.
Sigh, it's amazing how few people understand the labor cost is more than salary.
@@wgemini4422 sigh. or that managers are labor as well.
@@HaraldinChina Typically, they are not counted as labor in this kind of studies. But even if they did, they are not part of an union. Instead, they are part of a somewhat freer labor market that matches supply with demand. Therefore, there's no such thing as "overpaid" for managers as it's the labor market that determines their price. Of course, Germany has the general problem of an overly regulated labor market that indeed inflates the cost of a manager as well, just to a less degree.
@@wgemini4422 they are calculated into the average labor cost per car, which is total wage and bonus payment, divided by number of cars produced. That was my point.
I don't share your belief in a magical market with an invisible hand of god helping to set prices. Top managers have market power, by intimately knowing the investors, that's how they set their own salaries. For investors it's the choice between searching new C-suite managers or accepting their exorbitant salaries. Unions are the attempt to increase negotiation power for the workers, which is legitimate in a free market.
The cars are totally unaffordable for anyone in their prime so who cares about buying a porsche now?
They are probably expecting people to feel sorry that it is going to be harder and more expensive to buy +€100,000 Porsches...
All types of jobs are finish as AI will eventually replace most human. Only those who holds capital are irreplaceable.
The price of there new vans are off the charts. Over 50 thousand including vat here in Ireland. Hard for people to buy vans when they’re this high . It’s not sustainable
European here, many Eastern Europeans works in those factories for around 2000 euros, three to four shifts day and night. Buying EV in Europe is financial disaster compared to gas it is 1X higher to run and if you compare to diesel it is 2X. Prices of EVs from China or Europe is almost the same, but Europeans did the math and realized that EV are luxury lifestyle products for rich