INDEPTH: AUTO INDUSTRY
Volkswagen: Europe's biggest car maker under pressure
CBC News Online | February 10, 2006
It began as the "people's car" — Adolf Hitler's dream of making a car so affordable that every German worker could own one. He hired Ferdinand Porsche to design it.
Porsche had a long history in the auto business. The first vehicle he helped design was unveiled in 1898 in Austria and presented at the 1900 World's Fair in Paris. It achieved a maximum speed of 56 km/h. It broke Austrian speed records.
Porsche had two loves: building a car for the middle class and building racing cars. He had no trouble getting backing for the racing cars, but few companies were interested in his more practical models.
By 1931, Germany was in the grips of the Great Depression and Porsche was out of work. He formed his own company and by 1934, his designs had attracted Hitler's attention.
Volkswagen's first factory was built in what would become Wolfsburg in 1937. The company's official name at the time was Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH. Porsche was put in charge of the state-owned company. He focused on building his little, rounded "people's car" and handed his racing car projects over to his son, Ferry. He would eventually start the company that bore the family name.
Volkswagen was originally operated by the German Labour Front - a Nazi organization that employed slave labour. During the Second World War, the factory focused on military needs, such as tanks. It was targeted by allied bombers and destroyed, along with most of the city. By the time the war ended, it looked as though Volkswagen would have a tough time rebounding.
But Allied efforts at rebuilding Germany's auto industry would focus on Volkswagen. The plant at Wolfsburg was rebuilt and mass production of the Volkswagen began. In a little more than a decade, Volkswagen was building and selling more than half of West Germany's cars.
Volkswagen broadened its appeal on March 8, 1950 when it started production of what was called the "Type 2" — or the Volkswagen Bus. Rising demand convinced the company to build a new plant in Hanover, devoted solely to the bus.
In 1955, the company celebrated as the one-millionth original "people's car" rolled off the assembly lines. The look hadn't changed since the 1930s.
Worldwide sales for the company were strong except in North America, where drivers preferred big cars, and were uncomfortable with the company's Nazi origins. But that began to change in 1959, when an American advertising company got the job of selling the car to American consumers. The campaign dubbed the car the "Beetle" because of its shape and it touted the vehicle as exceptional value for the cost-conscious consumer.
Sales took off and for several years, the Beetle sold more than any other import in the United States.
In 1960, West Germany effectively denationalized the company when it sold 60 per cent of its shares to the public. Five years later, Volkswagen acquired Audi allowing it to reach a more upscale market.
On Feb. 17, 1972, Volkswagen laid claim to the world record for most vehicles built. Its factories had assembled 15,007,034 Beetles, beating out the old Ford Model T, built between 1908 and 1927.
The last Beetle to be made in Germany left the production line in January 1978. But production continued in Puebla, Mexico in a factory that was built in 1954. The 20 millionth Beetle rolled off the Mexican production line in May 1981. With demand in Europe for the Beetle still high, Volkswagen of Germany was importing them from Mexico up to 1985.
Worldwide demand for the Beetle declined in the 1980s as the car faced increased competition. Volkswagen focused its remaining production of the model in Brazil and Mexico. The last old-style Beetle rolled off a Mexican assembly line in a nearly 50-year-old factory in 2003.
In the first years of the 21st century, Volkswagen employed more than 300,000 people around the world — more than a third of them in Germany. The company has been pressing for concessions from its workers. Volkswagen said it took 50 hours to produce a car in its German operations. Its competitors, the company said, can do it in 25.
» CBC News:
VW ponders 20,000 job cuts (Feb. 10, 2006)
Volkswagen began an ambitious cost-cutting program in 2004. It reached an agreement with it unions in September to build a new sport utility vehicle in Germany — after the unions agreed to reduce production costs to keep it from being built in foreign factories. Volkswagen has also said it would reduce its workforce of 103,000 in western Germany, through early retirement and voluntary severance packages.
The company is also aiming to win back some of the American market. It currently holds about one per cent of the world's biggest car market. Volkswagen said it lost money on every car it sold in the United States because of the intense price competition.
Volkswagen builds four of the 10 most fuel-efficient cars available in the U.S. All are powered by the company's advanced, light duty diesel engine known as the TDI. The cars are extremely popular in Europe, but don't sell well in the U.S. Despite record gasoline prices in North America, diesel engines just haven't caught on here like they have in Europe.
^TOP
|
|
 |
 MENU |
|
|
| MORE: |
|
|
|
