Volkswagen, the Symbol of Germany Inc.

Volkswagen, the Symbol of Germany Inc.

In its country, VW is viewed as more than merely a producer of cars

By WILLIAM BOSTON

Updated Sept. 23, 2015 8:56 p.m. ET http://www.wsj.com/articles/volkswagen-the-symbol-of-germany-inc-1443052692?mod=e2fb

WOLFSBURG, Germany— Volkswagen AG occupies a place in German society that few companies hold in any country.

At its headquarters in central Germany is a tourist center called Autostadt (Auto City), a collection of shiny buildings housing VW displays and museums resembling a World’s Fair. It is one of Germany’s largest tourist attractions. The city of Wolfsburg, which was built around the auto maker, now has several Michelin-starred restaurants.

BMW AG and Daimler AG’s Mercedes-Benz are German status symbols but Volkswagen, “the people’s car,” really is Germany’s car of the masses.

And since the company employs almost 300,000 people in Germany at 29 plants across the country, it has links to millions of households.

Those roots help explain why the scandal over cheating on emissions standards has hit so hard in Germany. Politicians from Chancellor Angela Merkel to the state premier of Lower Saxony, which owns 20% of VW, have called for a full accounting.

The original Wolfsburg factory—a mile long, its entrances inscribed with Nazi-era commemorations in local German dialects—was designed to be bigger than Henry Ford’s factory and produce a million cars a year at a time when few Germans drove.

 

1934

Reich Association of the German Automobile Industry commissions Ferdinand Porsche, left, to design a Volkswagen, or people's car. Adolf Hitler is amused to find the engine in the model's trunk.

1945

The postwar British military government becomes trustee of Volkswagen, and asks it to produce 20,000 vehicles to meet transport needs during the occupation. The company is later administered by the state of Lower Saxony on behalf of the German federal government. Here, the first Volkswagens made in Bonneberg, West Germany, are parked in the factory's courtyard.

1948

Volkswagen's VW trademark is registered with the German patent office. Here, a 1957 Volkswagen Kombi Panel Van.

Today, the Wolfsburg plant is still the largest car factory under one roof in the world. And the Beetle and the blue and silver VW badge perched high atop Volkswagen’s 1960s era red brick headquarters are the icons of Germany’s postwar economic rise and widespread prosperity.

In the 78 years since the factory was built on a sandy bog that Adolf Hitler chose because it was at the center of the German Reich, Volkswagen has come to personify Germany AG.

Volkswagen is more a national institution than a corporation. Heirs of Beetle inventor Ferdinand Porsche control the company, but nothing can be decided without the support of Lower Saxony. VW is the state’s biggest employer and Germany even gave the state special rights to block an unfriendly takeover, known as “Lex VW.” The law has been modified by the European Commission, which wanted to ban it altogether, but Lower Saxony still cannot be outvoted.

Another difference is the tight relationship between VW’s management and the IG Metall labor union that represent its workforce. When Ferdinand Piech stepped down as supervisory board chairman in April, the former head of IG Metall was appointed as interim chairman, putting the union into the top post at the company. A fact that upset no one in Germany.

Just as the Beetle came to symbolize Germany’s postwar economic miracle, Volkswagen as a company embodies Germany’s idea of a social market economy. A little socialism, a little capitalism, and a consensus that building cars in Wolfsburg is about more than just making money.

Write to William Boston at william.boston@wsj.com