Closing factories will not be enough to save Volkswagen
economist.com
economist.com
This is reminding me of Motorola, or really any of the old cell phone companies that were blown away by Apple and smart phones. It was easier to get a company that was good at software to make phones, than it was to make a company that was good at phones to make software.
I expect a more telling difference is whether the management of the successful company is overtaken by people who are better at political infighting than competing with other companies
These massive companies that epically fail to adjust, is it primarily a management style (cliché representation: Private equity takeovers – focus on 'management is a job unto itself, I do not need to know much or care much about what this company actually produces', and perhaps as a consequence, cost cutting over care about the product, and considering the general opinion about your company and products as a 'brand thing that I do not need to care about; I have a marketing department for that who can fix this by tossing some ad euros at something')...
or is it more fundamental, that even with pretty good management, companies inevitably turn into a giant rusty smattering of cogs that generally keeps running but is nearly impossible to reconfigure? That we should e.g. study what Apple is doing with its odd corporate management structure: That it is _exceptional_ for a larger company to be able to pivot quickly regardless of market, circumstance, or management team?
Or is software development just uniquely difficult and therefore it is highly likely that a company that starts with a better-than-average grip on that and worse-than-average everything else still wins over a company that needs to 'buy in' to software?
Not enough data to really know, and the answer probably a convoluted mess of 'a little bit of everything'.
I know tech workers don't like to hear about this, but it's something you all need to keep in mind as you plan your careers.
One wonders why.
* Lingering influence of Jobs? Even now? * Their somewhat well known weird corporate structure? * A cultural conviction that they are the underdog, instilled decades ago when Apple was doing badly, a conviction that is cherished with such religious fervour it survives even today when Apple has been top 3 market cap world wide, has reigned the profitability-in-cell-phones charts for over a decade, and in general has a profitability that makes your head spin, it's incomparably large (literally: Compare it to other big corps and it is mind boggling).
I just don't know what it is. I find it remarkable that Apple does _not_ seem like it has had its fair share of political infighting and forgetting to compete. It has had its share of that, sure. But not its fair share. Not even a tenth.
Hardware engineers (most of them, anyway) make awful software developers.
They always get dregged on any slightly flexible process and higher level development.
The cost of programming those displays is relatively small and fixed, it doesn't get more expensive if you sell 1 million cars or 10. But these companies still haven't managed to have proper processes for the software platforms for their cars so the software ends up sucking.
They treat their cars like video game developers, once done and released there might be a few patches. But the next car is mostly rebuilding the software from scratch.
On an aside as more people are becoming aware that buttons and knobs are actually nice you will likely see them coming back, but only on the more expensive vehicles.
While the inflationary overuse for touchscreen is driven by cost (and fashion), it's not really like that buttons are coming back only in higher priced cars. Dacia being the cheapest European automaker uses lotsof buttons in their cockpits.
Car is perfectly fine (despite being an anaemic ICE), but damn fix your UX.
People shit on Teslas touchscreen, but buttons on your Toyotas are worse - smaller, crowded and hard to discern.
Audio connectivity feels designed by lawyers who wish you to crash car as quickly as possible (thinking about this loud - maybe it’s a good thing, like the tullock spike?)
Edit: Your not meant to try and pair your phone while driving on any car.
Would love to hear people's opinions on car UX though. The Tesla is terrible too, as are most newer car brands. I haven't minded Hyundai cars, and I recently drove a new Nissan that was decent.
I ended up just not using Bluetooth while I drove that car because it was such a nuisance. I'm not sure whether it was so bad because of incompetence (they never considered users not wanting to share contacts) or out of malice (they know they can wear people down through harassment and hassle to eventually share their data).
I will literally never get a car without CarPlay. But even excepting that, Tesla's UI mostly sucks.
The answer to shitty buttons isn't shove it all 3 layers deep in a touch screen menu, it's better buttons.
Siri is how I interact with my car while driving. Tesla’s voice recognition is straight out of a 2005 flip phone. I can’t just call someone or play the music I want to hear without touching screens. I can’t just tell the GPS where to take me because it doesn’t understand proper nouns. It’s maps routinely don’t have things or have inaccurate data. (I do love that you’ll be driving through a neighborhood and it shows you every goofy home-based business in the DB though.)
The last thing I want when driving is distraction and their UI seems designed to do it as much as possible, probably so you’ll give up and pay them for self-driving. Or you can drive at highway speeds while digging through a convoluted touch screen just to control your HVAC.
I use tons of apps on CarPlay that don’t exist on Tesla. Tesla supports very few. Apple maps is bad, luckily you can use others easily.
Tesla’s UI is so bad I honestly thought you must be trolling for a second.
Glancing through the article, it seems VW is doing the same mistakes as other corporations that are not software native: they see software development as an assembly line and think it works like an assembly line where you have an expected output rate.
Really? While I'm not a huge fan of the ID 3 or 4, I think both the 5 and especially 7 look OK. Plus the Buzz is pretty cool. I agree that all their ID cars are too expensive though.
How far from their roots they've wandered...
I mean if you have to pick a group to target, you could do a lot worse. That being said 80-90% of the ID Buzz's I actually see on the road are company cargo vans, so that might be the actual target market.
I've had a 22 Jetta as a loaner and it's the worst car I've driven in a long time. I've driven older jettas like 10-15 years ago and they were pretty sporty. This one's a boring sedan. The screen is so tiny. Its lane keeping is beyond useless.
We had to do a 6-hour road trip, and everyone agreed the seats are unbearable after about 2 hours.
"Appear weak when you are strong, and strong when you are weak" - Sun Tzu
VW as a brand went upmarket in the 2000s, with Skoda / Seat / jvs going for the meat. They became world class in repackaging and rebadging, and EoS helped a lot. That also made them kind of conservative in engineering, since everyting everywhere is super path dependent. You could find the same switch in a Seat Arosa and in a Bentley.
They are not trying to make a good EV, they try to replicate their ecosystem as a whole and that needs EoS above anything.
Looks like many companies are in a "zombie state" unable to survive high interest rates, high inflation, and widespread job losses happen mostly among high-income individuals?
"Green idea" seems to have failed completely, and the long-term effects remain uncertain. Meanwhile, far-right and far-left parties are gaining momentum, that's scary!
Companies come and go: c’est la vie.
Yet, it might be too soon to write down VW.
The current events have more to do with the entire Chinese society (knowingly or unknowingly) being led by the CCP to massively subsidize their manufacturing far beyond demand curves at >10x the rate of the west.
Many of their industrial companies now only survive as jobs programs that would collapse if they were not being subsidized by the government.
This is a publicly acknowledged long term play that is starting to bear fruit.
1) Invite tech companies like VW to manufacture in China.
2) Set up government funded parallel factories to quickly clone the output.
3) Compete on price with a government backed supply chain.
4) Flood the zone and put global competitors out of business who don’t have the 10x subsidizes.
5) Reduce subsidies and be the last company standing.
Edit: Here is a department of treasury talk on this from July: https://www.cfr.org/event/us-china-economic-relations-jay-sh...
It's not really tongue-in-cheek to suggest that labour rights for other countries are being fought to emulate other Western labour forces that transitioned away from 9-9-6 to 9-5-5 (and maybe aspirationally eventually 10-3-4).
For example, there is a growing backlash in China around the "inevitability" of 9-9-6 resulting in more youth (still a tiny minority, but growing) opting out. As manufacturing and the 9-9-6 (or worse) schedule transitions to cheaper countries, the cycle will repeat.
If you're afraid of a looming onslaught of cheap Chinese cars, just make 'em not cheap.
It’s not great in any case and one hopes diplomacy can solve it but I don’t see another path.
And then you have russia, which is basically the largest colonizer on the plant, and Saudi Arabia, North Korea, Syria, many African Countries... which are a gleaming example of human rights as we all know. Yet, you chose to pick on the group of countries which at least try?
I cannot understand your worldview.
Also electricity prices are largely back to pre-war levels https://tradingeconomics.com/germany/electricity-price , so is the gas price https://tradingeconomics.com/germany/gasoline-prices
An 'earthquake' at Volkswagen – and a crisis for Germany?
Then, the absurdly stupid sanctions on Russian Oil and Gas, coupled with the irrealistic and inconsequential energy transition and other absurdly emotionally charged decisions like phasing out nuclear power.
Germany industrial competitivity depended a lot on cheap Russian energy that could only be realistically replaced with Nuclear Energy.
Blaming volkswagen demise on incidental stuff like their issues with software is something that only someone as ignorant of the real world as a journalist from The Economist could do.
Edit: And moving away from russian energy is the best thing Germany did since the Berlin wall fell.
The reality nowadays is that for every single GW of renewable capacity generation you forcibly have to have another GW of dispatchable generation, usually natural gas, it is also inescapable that renewables, especially solar, displace baseload generation, reducing its ROI while not eliminating its fixed costs, making energy as a whole more expensive.
Most people have no fucking idea of how electric power generation and distribution and are easy to be mistified with bullshit accounting concepts such as LCOE. But what matter is the total SYSTEM-WIDE cost of energy.
And there is not a single place in the world where widespread adoption of intermitent non-dispatchable power sources haven't absurdly increased the final costs of electricity for the customers.
Of course, lots of people are making a lot of money out of that, a lot of talking heads have their careers based on that and they will say otherwise. So, just move to germany, california, UK or south Australia, enjoy your expensive electric bills, and stop worrying and learn to love increasingly frequent blackouts.
It is not that intermitent renewables are useless and can't be a part of the grid under some constraints. Also, if you have enough hydro-power potential, go ahead. But otherwise, unless you come up with a magic storage solution, solar and wind can't replace nuclear and thermal more than for a small percentage. And while we are at that, solar in a northern european country is a particularly dumb idea.
Nuclear is so out of the running economically that even with the (rapidly falling) cost of dealing with intermittency, renewables come out ahead.
Only if you do the funny math of LCOE. Because in the real world, in terms of system wide costs, this is laughable opposite to reality. More intermitent renewables -> Higher electricity bills, more grid instability.
And no, storage costs are not even close to be economically viable.
The biggest battery systems are able at most to cover the demand of a metropolitan area for a few hours by themselves. What you do in the winter on moderate to higher latitudes with fewer hours of daylight and the sun down in the horizon with very few wind?
A usual bit of dishonesty you see from them is computing the cost of firming intermittent sources by assuming batteries are the only storage used. This massively inflates the cost, since batteries are unsuited for certain storage use cases (rare correlated outages, seasonal storage) for which there are other, cheaper options. They can massively inflate the cost by doing this kind of strawman engineering. Nuclear bros lap up the numbers produced by this sort of fraud and repeat them unquestioned.
Careful analysis using all the options for dealing with intermittency (storage is not even close to #1) reveals that renewables are very affordable.
But anyway: if nuclear really is so much better, it doesn't need subsidy. So let's let them compete head on. I don't think nuclear can survive if that happens though, since no unsubsidized nuclear power plant has ever been built, anywhere, selling into a competitive market.
The whining about nuclear opposition eventually boils down to complaint that nuclear isn't being given the massive public subsidy it would need to get anyone to actually choose to build it.
Wind and Solar are great, but still require peaker plants to maintain 24x7x365 power. Grid-scale storage is coming along, but is still cost-prohibitive to do something like power the grid overnight from solar.
do you want to enable people who wage aggressive wars or what?
At the bare minimum, if the US can bomb and invade countries thousands of kilometers away from its borders due to their alleged security interests we should take into account the probability that Russia as a nation-state follows a similar logic when dealing with a country that borders them.
It is not like the US is some kind of exceptional entity that have some special rights to act in certain ways that are verboten for other countries.
Which consisted of what, precisely?
in regions that historically were Russian before Lenin?
Are you suggesting that there's some magical, enduring quality to the Russian Empire's territorial claims? Is every place the Russian Empire managed to sit on for a while ipso facto "historically Russian" -- and we should just accept this description at face value?
And before these regions were supposedly "Russian" -- what were they? What kind of people were living there? What became of them?
Would you refer to Okinawa as "historically Japanese", or Algeria as "historically French"?
Enlighten us, please.