Audi: rebellion among the rings - economy

  • Audi has recently fallen behind rivals Mercedes and BMW. Sales fell everywhere: in Europe, the US and China.
  • For a long time Audi was the place for innovations in the VW Group – meanwhile, the Ingolstadt even lie far behind in terms of productivity in the factories.

From Thomas Fromm and Max Hägler

Of course, there are also nice moments at Audi, in spite of everything. A few days ago, CEO Bram Schot was allowed to drive in front of the Villa Reitzenstein, the headquarters of Baden-Württemberg's Prime Minister Winfried Kretschmann, the first electric car of the group. There were some nice photos, the politician smiled routinely next to the Audi boss. Pictures like these then appear afterwards in annual reports.

Otherwise, this year for Audi has been rather below average, and it will probably be no nice anymore. The car manufacturer from Ingolstadt – one of the most important companies in Bavaria – currently has more than one problem. Above all, and this is especially noticeable in Ingolstadt's self-confidence: The VW premium subsidiary fell behind its rivals Mercedes and BMW with sales of 1.8 million cars last year. It went back, everywhere: in Europe, the US and China.

"Vorsprung durch Technik" was the slogan that lasted a long time. It was the eternal mantra that meant we want to be better than the others, we have technology that BMW and Daimler do not have. And so Ingolstadt thought for a long time that one would overtake the competition forever.

Technology out of control

What a mistake. Ironically, the "Vorsprung durch Technik" group had its technology no longer under control. Often the cars are not available, and there are still major gaps in the showrooms of the Audi dealerships. Audi strives to certify its new cars according to the new emission regulations ("WLTP"). Cars that are built but not yet licensed – at some point they filled the Ingolstadt large parking lots and the factory parking garages. Such a thing hurts.

Audi Works Council chief Peter Mosch knows that Audi is going to have a tough year. He says, "In the past, many serious mistakes have been made that the company needs to learn from."

(Photo: oh)

And even if the cars eventually land at the dealer: Are they really still the sporty sedan with the four rings that promises the marketing? The company is also behind in the image rankings of motorists. So what does Audi stand for today, when even the parent company Volkswagen shifts its lead in the development of self-driving cars from Ingolstadt to the headquarters in Wolfsburg? For a long time Ingolstadt was the place in the group where innovations took place. In the meantime, however, Ingolstadt citizens are far behind in terms of productivity in the factories.

Two men are important now. One is called Peter Mosch, has been with the company for 32 years and has been a works councilor for a long time. The other is new here, comes from the Netherlands and is called Bram Schot. Both are dependent on each other, one a little more than the other. Because Schot has no house power, which makes him even after two months still vulnerable. Schot could not build his own board team, he works with people who were there before his appointment – so people from the era of his predecessor Rupert Stadler.

Audi was never any VW daughter

And the employee side increases the pressure on the new. In any case, Mosch loses his usual great restraint: "Instead of management games, we expect open and transparent teamwork in the interests of the workforce," he said South German newspaper, "Above all, we expect that from Mr. Schot." The workforce supported him when he became chairman of the board in December. "Now it's time for him to repay this trust."

It will be "a very difficult year with very difficult negotiations," says Mosch. "We demand a goal-oriented strategy from Mr. Schot and his team." Now, Schot is actually working on a "transformation plan" and wants to sharpen the brand image until the Annual General Meeting in spring. But Mosch wants workers to have more say in this new constitution. "This strategy must give our colleagues orientation and, above all, a goal to be back in the forefront." Strategy, orientation, goals – actually things that should be self-evident.

But not so much at Audi these days. What went wrong? Audi was never any VW subsidiary. Audi was not Seat, not the house brand VW, not Škoda. Audi, that was the elite from Upper Bavaria, the technology supplier for the entire group, and the profit maker. That is another reason why Stadler, a longtime boss, should have been as proud as he was self-confident: How would the VW balance have looked in all these years without Audi?

In good times, Stadler contributed almost half of Wolfsburg's total consolidated profit. If you talk to supervisory board members today in Ingolstadt, with managers or with employee representatives, many say: The great success just around the turn of the millennium left Audi careless. From the "fire department mode" speaks one. Always everything at the last minute. At some point, hardly any model startup worked properly anymore. Almost always it was too late, to the customers, but especially in internal cooperation. But self-criticism was not in vogue in those years. It was better to celebrate oneself. Board members and developers came and went just like a football club that is looking for the right path every season. Their names were Michael Dick, Wolfgang Dürheimer, Ulrich Hackenberg or Stefan Knirsch and Peter Mertens. Then came the September 2015, the diesel affair struck, and eventually landed then even the head of Stadler in custody.

"Hit the strings"

While the competitors from Stuttgart and Munich had time for the future, Ingolstadt was primarily occupied with itself. More and more committees, more and more management personnel, but no clear goal. Works council chief Mosch makes clear demands on the Stadler successor Schot: "Even in management, structures must be streamlined – and consistently."

In recent years Audi has "hit the rails" here. Actually, Schot sees it that way too. But can the man without house power prevail against his colleagues from the higher management? Mosch demands of Schot therefore – more concretely – "less management levels".

Many levels, little leadership: Since the diesel scandal has become increasingly clear that Audi has been something of "the mother of fraud", the culture has finally expired, say Audian. An endless story that Audi pursued for a long time. In the spring, the prosecutor Munich II will probably make the decision on an indictment. Then Audi will be constantly in the headlines again, they are used to it in Ingolstadt. And yet it costs energy on the way to the future. Since the beginning of the diesel affair, however, the brand claim "Vorsprung durch Technik" is also in question.

What should be built for cars now? There was no clarity, no line on the core question of every car company. Instead, insiders report, everyone wants to realize themselves: Here is a special panoramic roof, there a special sheet metal in the body – which drove the construction costs upwards. Derivatives, such as modified versions of an A4 or Q3 are called, sometimes with up to a billion euros to book, almost as much as the development of a new car.

"It costs us so much energy and money to put something on the street" is a phrase that is often heard. The works council from Bavaria and the manager from Holland have a lot to talk about. But they agree on one topic: the engines of the future. "We at Audi are increasingly relying on electric cars, and our e-tron alone already shows how e-mobility really works," says Mosch. The Baden-Württemberg Minister President Kretschmann drives him sample. Finally, it says from his house. After all, that means something for a Swabian Greens, normally you drive different cars in Stuttgart than those with the four rings from Ingolstadt.

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