Today, top Volkswagen executives used corporate jargon to tell employees that some of them will probably lose their jobs as the company tries to repair damage from misconduct that happened way above their pay grades.
According to various news reports, CEO Matthias Müller spoke to a group of 20,000 employees in Berlin about the company's response to revelations that Volkswagen rigged cars to show they were emitting far less pollution than they actually were.
In his speech, Miller said Volkswagen is “putting all planned investments under review,” that “our earnings and our financial planning are under enormous pressure” and that “this won’t be painless." (Normal People Language: Volkswagen is probably cutting a bunch of jobs because Wall Street isn’t happy.)
Meanwhile Bernd Osterloh, a top labor executive, said the company will “call into question with great resolve everything that is not economical” and that, “together we will convince the financial markets of Volkswagen’s strength." (NPL: if we deem you too expensive or unnecessary to employ, you may not be here for the next town hall because Wall Street isn't happy.)
He also said bonuses will be reviewed across the company, with particular attention paid to senior executives. He added that employees shouldn’t have to “pick up the tab for the misconduct [of] a group of managers.” (NPL: this carefully worded truism states the obvious, but does not promise to avoid job cuts. And workers who do keep their jobs could still see their income drop.)
A Volkswagen spokesperson did not respond to a request for comment in time for publication.
This interpretation of Müller and Osterloh's statements is based on a long history of corporate executives standing up before the world and saying things must change after malfeasance takes place.
Big oil executives have done it after spills, bankers have done it regarding a variety of reckless or irresponsible practices. They say it will be tough and costly, that offenders will be held responsible and that employees must stand together and be strong. Then weeks or months later, the companies lay off thousands of ordinary workers to protect profits as they grapple with fines, lawsuits and new regulations. Top executives rarely bear the financial brunt of damage that occurs on their watches.
It's useful for normal people to know that CEOs say things all the time which only they, Wall Street investors and analysts understand. It’s a great strategy: they say what they truly mean in vague jargon, and also say some carefully worded things that make it seem like they don’t plan to hurt anyone. But none of the artful language of senior VW executives blunts the ultimate impact on rank-and-file employees. The company now has about 592,586 workers.
Three things are important to note here:
- Martin Winterkorn, the CEO who oversaw the wrongdoing at Volkswagen, may still receive a $32 million pension.
- VW’s carefully orchestrated speech to workers made its way to the press, and sent messages to Wall Street and the public at the same time.
- After a long downward trajectory, Volkswagen’s stock rose 2% on the news. None of the headlines specifically mentioned potential layoffs.
I oversee Fusion's money section and have spent most of my time as a journalist writing about banks and finance. I live in Brooklyn with my partner Geoffrey & our two dogs, Captain & Tallulah. Favs: leopard print, Diet Coke, gummy candy, Ireland.