WOLFSBURG – City driving can be a pleasure, on the condition that the city is Wolfsburg.
Robert Schmidt glides effortlessly through the city’s multi-lane traffic arteries in his Volkswagen Passat. He steers the car past Dieselstrasse on the left, while on the right are the towering red chimneys of Volkswagen’s main factory, the largest factory in the world. Then he dips into the car tunnel that runs under Porschestrasse, Wolfsburg’s big shopping street.
“This city was not built for pedestrians,” says Schmidt. “It’s a rather suburban life here.” He should know, he’s a real estate agent making a good living out of selling comfortable family homes to Wolfsburg residents.
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Schmidt, 46, also runs his agency from the outskirts of town, in one of those quiet residential villages where many of Volkswagen’s tens of thousands of employees have bought their houses. There, the barbecue grills are blazing on the weekends and three brand-new VW models are often parked in the driveways.
“What many people in this town don’t really realize,” says Schmidt, driving past the prairies of parking lots next to the main plant, “is that they’re doing pretty well.” For VW workers, 60,000 euros gross per year is a normal salary here. In addition, workers are almost always guaranteed a profit share every year: 4,700 euros in wage bonuses for this year alone.
Ordinary workers are certainly among his customers: “A regular worker can still afford a house here,” Schmidt adds, “even though property prices aren’t exactly cheap.”
The question is how long it will stay that way if the severe cuts that the VW board has now threatened come about after, for the first time in its history, Volkswagen is considering shutting down plants in Germany.
Job cuts, plant closures, cuts on wage increases: everything seems to be up for debate at the moment after the company’s management terminated the current collective agreements earlier this month.
The workers in the council are furious, but it is still unclear which areas could be hit hardest by the layoffs. But Wolfsburg — and everyone here is emphasizing this — is synonymous with Volkswagen and is therefore at the center of the storm. Some 60,000 employees work at the main plant, of the almost 130,000 people who live in the city. In purely mathematical terms, almost the entire working population is employed by the company or in partner companies.
What is life like in the city that embodies the prosperity that the German car industry has long brought to the country?
Fairytale homes
Schmidt drives his car westwards out of the center. It is only a few minutes from the old town of Fallersleben — a place steeped in history which, like most of the surrounding villages, was incorporated into Wolfsburg in the 1970s. Half-timbered houses line the narrow streets, on the left is Fallersleben Castle, and on the right is the birthplace of Hoffmann von Fallersleben, writer of the national anthem, the Song of the Germans.
Schmidt turns into one of the side streets, where the front gardens are well-kept and the single-family houses have pointy roofs. “I’ve been trying to get a property here for a long time,” says the estate agent. The home structure is relatively simple, on rather small properties from the 1950s and 1960s, when the first generation of VW employees moved in here. “Today, a house like this costs a good 500,000 euros,” says Schmidt.
Young people with their colorful hair, piercings and tattoos. Hope for the future of the old German industry rests on their shoulders.
In Wolfsburg, it is now a matter of defending this prosperity. Defending it from the competition from China, from technology companies such as Tesla, which, with their powerful software, get more out of their cars than others on the market.
Within sight of the Volkswagen factory gates, on the long Porschestrasse, which runs from the Mittelland Canal right through the city, the young people with their colorful hair, piercings and tattoos immediately catch your eye, smoking and chatting in front of a futuristic-looking building. A large part of the hope for the future of the old German industry rests on their shoulders.
They are all studying programming in “42 Wolfsburg,” with the number always pronounced in English. After all, everyone at the programming school speaks English. That includes Vlad Tudakow, who is responsible for marketing at this unusual educational institution. His most important message: “We are open to everyone. And there is no fee to pay.”
In fact, you can apply to the 42er school without having any special prior knowledge. It is financed by sponsors who have left their emblems here in the foyer: Volkswagen and its software division Cariad, of course, but also Bosch and Lufthansa.
An investment by companies in their future staff. The school’s concept comes from France, and there are now more than 50 branches internationally, in Germany in Wolfsburg, Berlin and Heilbronn.
“A high school diploma or other educational qualifications are not necessary,” says Tudakow, “you just have to be over 18 years old.” Ultimately, the programming school, even though it receives thousands of applicants every year, trains a very small tech elite. “Many of the participants move into permanent employment as software engineers after their first compulsory internship,” says Tudakow.
At the moment, however, the weakening economy is being felt. Students are returning to the school more often for the second part of the training, in which they specialize in a field such as artificial intelligence or vehicle software. But they probably have less to worry about their future than most people walking along Porschestrasse outside the school’s doors.
Fueling city coffers
Despite Wolfsburg’s great prosperity, despite the millions Volkswagen has invested in events and landscaping around the main plant, despite museums, parks, stadiums, castles and water parks – Wolfsburg’s city center presents a depressing picture. It is the wild mixture of run-down department store architecture of the 1960s and 1970s that is so typical of western German towns, now sparsely filled with nail salons, kebab restaurants, and some clothing shops.
A rather poor offer, especially for a city where salaries are so high: at 4,797 euros a month, the median income here exceeds the national average by almost 1,000 euros, according to an analysis by Die Zeit. Unemployment is below six percent, a comparatively low figure. But it’s hard to imagine how depressing Wolfsburg would end up looking if Volkswagen did lay off thousands of employees.
“There is a lot of uncertainty at the moment”
Dennis Weilmann is on the roof terrace of the town hall, looking out over the city where he was born: he has been the mayor for three years. The VW factory dominates the panorama as far as the horizon in the north, while to the south lies Wolfsburg’s city center with its historic landmarks, and the many apartment buildings that were built by the Nazi regime at the end of the 1930s to house workers in the new car factory.
“There is a lot of uncertainty at the moment,” says the CDU center-right politician. “It is important for us that a good decision is made, and quickly. Everyone involved should work together on a solution.”
When it comes to the crisis at Volkswagen, Weilmann, 49, expresses himself as diplomatically as possible. On the one hand, his voters hope that as little as possible will change for them, that their pay will remain good, and that their jobs will be secure. In other words, they hope that the company’s austerity measures will not be too drastic.
On the other hand, there is a company that urgently needs to reform itself: because if Volkswagen fails, Wolfsburg will be dragged directly into misery. “I don’t think,” says Weilmann, “that I am violating tax secrecy if I say that Volkswagen makes a significant contribution to the city’s income.”
Destined for decline?
Nevertheless, the times when Volkswagen paid huge sums of money in trade tax are over. German tax law works in complicated ways, but ten years ago, says the mayor, the city was bringing in a total of 300 to 400 million euros, and now it is only half that.
“That means we too have to save money to invest in the future of this city.” Given the current situation, it is unlikely that the times of lavish income will return – quite the opposite.
This is reminiscent of the situation that many German municipalities have been familiar with for some time, for example in the former large industrial locations of the Ruhr region, which have only barely overcome the structural change when they had to move away from coal and steel production. Is Wolfsburg and the entire region in the southeast of Lower Saxony, destined for decline?
Running on empty?
In the new Steimker Gardens apartment complex, which is only a few minutes away from the city center, people resist the idea. Jens Russwinkel, an engineer at Volkswagen since 1998, with a long stay for the company in China, greets us from his garden fence. He lives with his wife in one of the modern terraced houses that were built a few years ago which, together with an ensemble of larger apartment buildings, are supposed to form a “futuristic green neighborhood.” At least, that’s what it says on the investors’ billboards.
Many are surprisingly optimistic
Volkswagen’s real estate division is clearly involved in the 1,800-unit project: the automaker is involved in almost everything that happens in this city. Russwinkel thinks the promise of the green neighborhood has been fulfilled, and he is “very happy” with his new home, even though construction is still underway in many parts of the vicinity.
Russwinkel does not want to talk about the company’s layoff plans. The situation is very tense at the moment, and this emerges clearly when talking to Volkswagen employees. And yet many are surprisingly optimistic. The new electric models will soon be on the market, and there will be an affordable Polo successor. These are VW’s new hopes. The confidence in the steady upturn is difficult to shake off from the Wolfsburg-based company; somehow, the show must go on. Like in the famous old advertisement for the Volkswagen Beetle: it runs and runs and runs and runs and runs.
