Sunday November 14, 2021
VW Trinity versus Gigafactory
Volkswagen is chasing Tesla
From Helmut Becker
Volkswagen boss Diess lands a double coup in a script-ready battle with the works council. His miracle weapon: Trinity. A second plant in Wolfsburg for a new electric car is supposed to save the main plant and accelerate the race to catch up with Tesla. This stays tuned.
You are already used to headlines from VW headquarters in Wolfsburg, but the accumulation in recent weeks is new. It always revolves around a conflict of competence between the works council and the executive board, personified by the respective chairmen of the committees. Afterwards there is regular truce, but this time with far-reaching strategic determinations for the world’s largest automobile company and its almost 700,000 employees.
The conflict in autumn 2021 is ready to be scripted. In the ring: Volkswagen boss Herbert Diess, who was already conflicted in BMW times, and his works council opponent Daniela Cavallo, who followed Rauhbein Bernd Osterloh into office when he switched sides in the summer and joined the service as HR director of the VW truck subsidiary Traton of the capitalists.
First of all, the conflict is formally about protocol issues. Whether CEO Diess has to answer questions from the workforce at the first works meeting after Corona instead of going on a long-planned trip to the USA. This should change its scheduling and provide information to the workforce about the board of directors’ plans for the future of the Wolfsburg parent plant and the 60,000 employees at the site, demands Cavallo. The worries about the jobs, the main plant is not busy.
In fact, it is also about more fundamental issues: the question of “air sovereignty” in corporate decisions. Who is in charge of strategic decisions in crisis situations, such as the construction and occupancy of new products and plants? The board of directors and the capital owners or, as has been the case since the 1970s, the works council and the employees?
Do not change horses in battle
The situation in the Wolfsburg parent plant is dramatic. The pandemic and the lack of chips have dramatically reduced capacity utilization. In the years before Corona, there was still talk of around a million cars that should be produced in the main plant. In 2020, just under 500,000 cars were built in Wolfsburg, and the trend is falling. The workforce in Wolfsburg has been bobbing around on short-time work for weeks and months. Fear is rampant that the plant could be left behind when the turn to electromobility takes place.
When Diess spoke of a possible reduction of 30,000 jobs in internal rounds, the conflict between the group management and the works council broke out openly. Even a fall of Diess is suddenly considered possible. Diess gives in and then – contrary to what he had planned – answers questions at the works meeting.
And stay in office, true to the old military wisdom, you don’t change horses in the middle of a battle. Diess and the works council abandon each other and concentrate on their mutual opponent: Tesla and Elon Musk, who will soon even become a formal member of the German automotive industry with the opening of the “Giga” factory in Grünheide, Brandenburg.
Tesla builds three times faster than VW
At a crisis meeting in front of 120 top managers, Diess made the situation very clear: Volkswagen produces too slowly – and too expensive. Tesla and the emerging manufacturers from China are faster. VW, he warns, needs more than 30 hours to build its ID.3 electric car. That’s three times as long as Tesla needs for its Model 3. In terms of quality, the Californians and the Chinese have meanwhile reached European standards. Volkswagen is under massive pressure, Diess makes clear. If everything stays the same, VW is no longer competitive on the world market.
As a Solomonic solution to this conflict situation, the next headline bursts: Volkswagen is planning a new factory for the production of electric cars on the green field in the vicinity of the Wolfsburg parent plant. A kind of second Wolfsburg plant is planned because VW did not consider it possible in the existing plant structures while production of the combustion versions of bestsellers such as the Golf and the Tiguan compact SUV was running to build structures as efficient and competitive as the competitor Tesla in Grünheide – that great role model for Herbert Diess.
Diess wants to build a completely new electric car called Trinity on the green field in Wolfsburg. “Trinity will revolutionize automobile manufacturing in Wolfsburg,” he promises. According to estimates from corporate circles, the construction could cost several hundred million euros. That’s a tough job he wants to drill, but the price is significantly lower than the nearly $ 30 billion diesel fines in the US after 2015.
Fight for Wolfsburg, for jobs and market leadership
At Volkswagen, Trinity is one of the key points in the investment and hedging strategy for the next five years. The next generation of partially autonomous electric cars will roll off the assembly line in the new plant from 2026 onwards. It is planned to produce 250,000 Trinity annually.
The Wolfsburg parent plant should benefit from this. The plans for the old plant are as follows: If after 2030 the demand for combustion models declines, another production line for electric cars is to be built here. For the current combustion engines, successor models are planned for 2023, which are also to be built here. The entire renovation is planned during ongoing operations.
The great future hopes for Wolfsburg, however, rest on Trinity. The new sedan should set new standards in terms of range, charging speed, digitization and production. The market launch is not planned for five years, however, for 2026. The reason is probably that VW is dealing with a completely redesigned vehicle system in which the most modern electric drives, largely self-programmed software, networking and autonomous driving technologies are to be used. VW is using a further developed platform for this, which its subsidiaries should also be able to access. A total of more than 40 million cars are to be built on this SSP platform.
Trinity is Diess’ secret weapon in the fight for the continued existence of the main plant and in the race to catch up with Tesla. “Trinity has to raise the location to a new competitive level, has to revolutionize it. Also with new processes”, explained Diess. In the end, it is also about jobs. Because: “It is not Mr. Diess, the supervisory board or the employee representatives who decide about the workplaces. The customer decides and the customer buys the product that offers more quality, more features for a better price. That is why we have to take up the fight.” With that, Diess hit the nail on the head. Why, with so much electrical enthusiasm, he did not sign the Glasgow climate declaration of many automobile manufacturers, including Daimler, for the mandatory end of combustion in 2035, remains a mystery.