1 Volkswagen Case Study George Dallas June 2020
Volkswagen Case Study George Dallas June 2020 Volkswagen’s Dieselgate: corporate governance and sustainability Of the many companies representing German industry, Volkswagen AG (VW) has long been one of the most recognised, and iconic, brands of “Deutschland AG”. As an automotive conglomerate with a long, and, at times dubious, history, VW is one of the world’s largest auto producers, typically running neck and neck with Japanese rival Toyota for global market dominance. As a publicly listed company, VW is widely held by institutional investors, even though its ownership structure—and voting control-- is dominated by ownership from the Germany’s Porsche/Piëch family, the German Federal State of Lower Saxony and the Qatari sovereign wealth fund. It is included in the German “blue chip” DAX 30 index, which ensures VW’s inclusion in passive investment strategies indices based on the DAX 30, as well as other global equity indices. In 2014 Volkswagen was the world’s largest auto producer by volume– a goal articulated by Piëch in 2005. It produced 10.2 million vehicles, with 12 brands and had an employment base in excess of 600,000—45% from Germany. While Germany itself represented 12% of VW sales, 26% of its production came from Germany—a high cost production base by global standards. It was, and remains, an important source of employment (and tax revenue) for the city of Wolfsburg and the German state of Lower Saxony. VW’s deep ties to its community are reflected in its ownership of the local football (soccer) team, VfL Wolfsburg, which competes in the world renown German “Bundesliga”, in a stadium named Volkswagen Arena.
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