Power Players: How did VW go off track?

Michelle Fleury (0:00)

Here we go, then. Do you two remember this?

SPEAKER_2 (0:05)

Walt Disney Productions, The Love Bug. He's a scrappy little people that adopts a has-been race driver and turns him into a champion.

Michelle Fleury (0:15)

Oh, so much nostalgia there.

Will Bain (0:17)

Is this a flex if I say I only remember the reboot with Linster?

Maroš Šefčovič (0:21)

These youngsters, these young.

Rahul Tandon (0:24)

I never liked Herbie, I'm going to be honest with you. I mean, you know, happy car. What a load of nonsense.

Michelle Fleury (0:30)

I don't know you. It's such a grinch. I loved it. The lovable VW Beetle that conquered Hollywood. For decades, it was more than a car company. It was a symbol of German engineering, a pillar of Europe's industrial success. Now it faces a much less charming ride. Sales are under pressure, Chinese rivals, well, they're gaining ground, and the company is confronting some difficult questions about its future. So today, on Powerplayers from Business Daily, we're asking what went wrong at Volkswagen? And is this just a crisis at one carmaker or a warning sign for Germany's industrial model itself?

I'm Michelle Fleury in the studio in New York.

Will Bain (1:17)

I'm Will Bain here in the studio in the UK.

Rahul Tandon (1:20)

And I'm Rahul Tandon, also in a studio in the UK, but a different one to Mr. Bain.

Michelle Fleury (1:25)

So did either of you ever drive a VW, own a VW?

Rahul Tandon (1:31)

I've still got a VW. I'll be honest with you. My mum would only drive Volkswagens. And she passed away a few years ago, but we've still got her Polo, but she had lots of Golfs. And I have to say, they've been part of my childhood growing up. So I don't like Herbie, but I do like a lot of other Volkswagen cars.

Will Bain (1:51)

My mum's VW Charan, back in the day, if people remember those, the people carriers, used to bring me, my two sisters, and our mates who used to come to school with us in it as well. And it was a bit like that. I know people have speculated about whether the mystery wagon in Scooby Doo was actually a VW car or not. My mum's VW Charan was definitely the real mystery wagon, all sorts of characters on there.

Michelle Fleury (2:14)

Yeah. And my mum had a VW Golf for decades as well. So I guess this one hits home.

Look, VW, a symbol of Germany's industrial might, but it is in trouble. Let's go back a bit to understand really, I mean, how big a deal it is. We need to kind of go back to how big it became a rule. I mean, this company started, what, back under the Nazis. How did it end up as one of the world's biggest car makers?

Rahul Tandon (2:40)

It began in the 1930s when Adolf Hitler had this idea of trying to make a car that was accessible to most particular Germans. Got a guy called Ferdinand Porsche to design it in the early 1930s. In the 1937, they formed the company for the preparation of the German people's car. First factory built in Wolfsburg came up in 1938 Then the war happened. And this is the thing with Volkswagen. It had been a controversial company. They had the factory.

You know, there was people, forced labor, making products during the war. Come out of the war, the Brits have taken over the factory and then it was a Brit who got it going. So it's an extraordinary start of a story of a company that, you know, had some pretty difficult links. It got through that. And I think that is the point of Volkswagen. We have the Beetle after that and then the company is growing from that period on to becoming a company that we all know and love today.

Michelle Fleury (3:33)

Then we get to the 70s. I mean, let's remind ourselves how Volkswagen tried to sell the brand to the world.

SPEAKER_2 (3:39)

Try looking at a Volkswagen this way. It's the only small car with a sealed steel bottom. And the VW is built to take a little punishment. In fact, the VW is so well put together, it's practically airtight.

Now, what other car gives you this kind of quality at this kind of price?

Will Bain (4:09)

Having known your mum, Rahul, I can see now why you brought this up, taking shots at her driving here.

Michelle Fleury (4:15)

Not at all.

Rahul Tandon (4:16)

Not at all.

Michelle Fleury (4:17)

Yeah, because that ad, we should point out, it ends with the car being driven into the water to prove just how airtight it is.