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A Solution for Transnational Labour Regulation?

Company Internationalization and European Works Councils in the Automotive Sector

Axel Hauser-Ditz, Markus Hertwig, Ludger Pries and Luitpold Rampeltshammer

This book examines the role that European employee representatives play in the restructuring of firms. In a globalized economy, company internationalization and transnational restructuring are of growing concern for employees and trade unions. In the European Union, the still rather new institution of European works councils provides basic rights for employees. Using examples of eight large automotive manufacturers like Volkswagen, GM or Toyota, the volume analyzes the internationalization strategies of the companies and the effects of European works councils, pointing to a high degree of variation in strategies and effectiveness of cross-border employee representation.


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Chapter 5: Volkswagen


83 Chapter 5: Volkswagen 5.1 The Volkswagen Group 5.1.1 History and characteristics of the Volkswagen group With more than 6.4 million vehicles sold in 2008, the Volkswagen group is the larg- est vehicle manufacturer in Europe. The origins of the group extend back to 1937 when the ‘Gesellschaft zur Vorbereitung des Deutschen Volkswagen mbH’ was established to manufacture a new car developed by Ferdinand Porsche.84 Over the course of its history, the company has evolved into an internationally active and highly complex group encompassing a large number of subsidiaries (Eckardt et al., 2000; Haipeter, 2000: 124). Volkswagen’s development has been characterised by three main features. 1. The acquisition of marques, a concomitant widening of its vehicle range, and a shift from a Fordist production strategy to a combined Ford-Sloane model. 2. Early internationalisation of sales and production. 3. Embeddedness in a legal framework, with a unique ownership structure and a governing statute that applies to Volkswagen alone (the ‘Volkswagengesetz’).85 In 2010, the group had two divisions: automotive and financial services.86 The auto- motive division consists of ten brands: in addition to Volkswagen (passenger cars), it includes Volkswagen (commercial vehicles), Audi, Škoda, SEAT, Bentley, Bugatti, Lamborghini, Scania (since 2008), and Porsche (since 2010). The group is structured along the three dimensions of functions/business processes, products, and markets (regions) (Adelt et al., 2008: 44ff.). For a long period, VW represented the epitome of Fordist mass production, centred on volume production of the Beetle (Jürgens, 1998; Boyer and Freyssenet, 2002: 58f...

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