There are no easy CEO jobs in the automotive world, merely narrow degrees of extreme difficulty. Right near the top of the difficulty-o-meter is running Volkswagen. Not only is the automaker gigantic, it’s just the right mix of family-, state-, and publicly-owned to be an absolute nightmare to lead. There are also the enormous expectations that come with being the second largest automaker in the world, plus all the regional politics.
The longstanding critique of Volkswagen is that, as an institution, it’s been slow to recognize its own weaknesses. Oliver Blume, the current head of both Volkswagen and Porsche, stepped into the job at approximately the worst time. Can he make the best of it? There are some clues in a recent interview that suggest he might just have the right mindset to pull it off.
If the Morning Dump had existed ten years ago when Mary Barra took over GM’s top job, I’d have probably said something similar about the steep challenges she faced. While the company isn’t in perfect shape, it’s vastly improved in that time, and Barra deserves a lot of credit for it. In lieu of credit, she received nearly $30 million last year. Between the credit and the cash, always take the cash.
The United States is not exactly making friends around the world right now, which risks pushing some close allies further into the hands of China. Also, the current administration has been taking shots at BMW for… making cars in the United States? Weird times.
‘We’re Not Presumptuous And Know Everything’ Says VW CEO
I once took a class on the modern presidency in college, and what’ll always stick with me is something the professor said the first time we met. He asked the room of kids barely old enough to vote if they thought they could be a future POTUS. A few students raised their hands. I did not.
His advice was that they should aim to be good presidents, not great presidents, because the only way to be a great president is to face a terrible crisis. Lincoln, Washington, and FDR all had lives defined by wars and turmoil.
In that sense, Volkswagen’s Oliver Blume is in a good position to be a great CEO. When he took on the top job at VW, he was already CEO of Porsche, which, let’s face it, is the better job. Porsche is a beloved brand with huge upside potential and the ability to squeeze nice margins out of custom work. Volkswagen, in 2022, was a tangle of mixed priorities coming off of a self-inflicted crisis (Dieselgate) and an exogenous one (the pandemic). That’s to say nothing of the challenges of electrification and falling market share in China.
I’ve written this before, but VW in the Piëch era produced some amazing cars at the expense of recognizing its own limitations. The VW approach to everything was to toss engineers at it, assuming the eventual superiority of its decision-making and engineering. In the key areas of electrification and software, this approach failed. Now it’s up to Blume to clean up this mess.
With his not-quite-purchase of Rivian, Blume showed he was willing to concede defeat if it meant creating a better product. Subsidiary Scout’s shift to EREV was another sign that the automaker could be flexible in a way past VW regimes were not (famously, VW dismissed hybrids because they insisted diesel was the way, which ultimately led to them having to cheat emissions tests to make the untrue suddenly true).
Has that philosophy taken hold? Germany’s Manager Magazine (which is German for “Manager Magazine”) has a long interview with Blume in which he talks about the various challenges facing him and the company. It’s a lot of CEO-speak, as expected, but there are a couple of answers that struck me as positive developments this morning.
Specifically, the interviewer harped a lot on the idea that VW was partnering with different firms for seemingly overlapping objectives, including self-driving and electric vehicles:
Anyone who looks at your key decisions of the past two years gets the impression that you’re losing confidence in your own strength. There are numerous alliances with smaller partners, including XPeng in China and the US electric car manufacturer Rivian.
This brings us to the question of what Volkswagen actually needs to do itself. We continue to manage our core competencies entirely internally – 100 percent of the time. We acquire other things if the added value is greater. And for some technologies, we seek out strong partners and develop them jointly. On the one hand, we manufacture battery cells ourselves in order to build up a high level of expertise and leverage economies of scale. At the same time, we work with regional partners to be more flexible. In software, we develop key applications ourselves and have strong partners for architectural elements.
And then the former teacher becomes a student?
We combine our strengths. Since the Eastern and Western worlds differ significantly when it comes to software, we need different approaches. We can’t possibly do everything ourselves. We’re not presumptuous and know everything. We learn from everywhere. That’s also my expectation of our teams.
Even with the Google translation, I think that’s quite clear. “We can’t possibly do everything ourselves. We’re not presumptuous and know everything. We learn from everywhere” doesn’t seem like an acceptable answer to any question in the Piëch era, even if it might have been the one the company has long needed.
I am often critical of CEOs here, so I feel like it’s important to point out when one of them seems to have the right idea.
Mary Barra Got $29.5 Million In Compensation Last Year
General Motors is an extremely solid company these days, and CEO Mary Barra is being rewarded for it, according to this Automotive News report:
Mary Barra received compensation worth $29.5 million last year as CEO of General Motors, a 5.9 percent increase as the automaker achieved strong earnings and executed on key business goals.
Barra’s base salary of $2.1 million was unchanged from 2022 and 2023, according to an April 11 filing with the U.S. Securities and Exchange Commission. Her stock awards rose 33 percent to $19.5 million, but options dropped to zero from $4.9 million in each of the past two years. Nonequity incentive plan compensation increased 27 percent to $6.7 million.
GM’s performance in 2024 was “a clear reflection of the successful efforts of our extraordinary executive leadership team, led by Ms. Barra, to drive our strategic transformation forward and invest in the business to grow value for shareholders,” Wesley Bush, chair of GM’s compensation committee, said in the filing.
Considering Carlos Tavares got $23.9 million last year, that almost seems like a deal.
How Many Times Can America Lose The Vietnam War?
If you think about it, America has been on an impressive streak of turning enemy combatants into beneficial trading partners. Germany, Japan, South Korea, and Vietnam were all hostile nations at one point. Vietnam, in particular, has become an important balance to Chinese trade (or at least, direct Chinese trade).
Welp, so much for that. From Nikkei Asia:
Chinese President Xi Jinping arrived in communist comrade Vietnam on Monday and called for defending a multilateral trade system that is being rocked by U.S. President Donald Trump.
“Trade wars and tariff wars have no winners, and protectionism has no way out,” Xi wrote in an article posted on the Nhan Dan, the official newspaper of the Vietnamese Communist Party, ahead of his visit. “We must firmly defend the multilateral trading system, firmly maintain the stability of global production and supply chains, and firmly maintain an open and cooperative international environment.”
Xi was greeted at the airport by Vietnamese President Luong Cuong, who was appointed in October. It is rare for a president to receive a foreign VIP at the airport. These high-level airport receptions are usually hosted by government ministers or senior party members, as was the case with Trump’s visits in 2017 and 2019.
As Nikkei Asia reports, this is the second trip to Vietnam in under 18 months.
Why Is The President’s Trade Advisor Attacking BMW?
BMW has been in South Carolina for over 30 years and has proven to be one of the best corporate citizens in our state.
Their presence is a major benefit to the South Carolina economy and it is much appreciated.
— Lindsey Graham (@LindseyGrahamSC) April 8, 2025
What? Why?
Ok, a little backstory here, which is that President Trump’s main trade advisor, Peter Navarro, has been taking shots at automakers for no obvious reason. Early last week, he called Tesla merely “an assembler” of cars. I missed this, because I was focused on the Musk thing, but in that same interview he also took a swing at BMW on CNBC saying:
“And the thing like, you take automobiles, what we’re doing now is a scam like BMW comes to Spartanburg, South Carolina, and all we do is assemble German transmissions and autos… It’s like they get all the good jobs. They get all the good profits.”
The whole interview is kinda unhinged, claiming that auto plants are going to get built in months and not years. In addition to a response from South Carolina’s senator, there’s also the response from BMW:
Plant Spartanburg is an eight million-square-foot facility with three body shops, two paint shops, two assembly halls, and a metal stamping facility for body panels. More than $14.8 billion has been invested since 1992, and 11,000 highly skilled associates assemble 1,500 BMW Sports Activity Vehicles daily—400,000 a year—with parts from hundreds of suppliers across the United States. Our BMW X models are among the most complex vehicles in the world, and they are highly desired by customers everywhere.
The plant in Spartanburg has been an important location in our global BMW Group production network for over 30 years. It is also our largest plant worldwide, serving domestic and international markets with the highly acclaimed BMW X models. In 2024, the plant exported approximately 225,000 BMWs, with an export value exceeding $ 10 billion, making it the largest automotive exporter by value in the United States. Since 2014, the plant in South Carolina has exported over 2.7 million BMW vehicles, representing approximately two-thirds of its total production, with an export value of $ 104 billion.
We export more vehicles from the United States than we import into the country. Plant Spartanburg generates a total economic impact of $26.7 billion for our state, supporting nearly 43,000 jobs and $3.1 billion in wages and salaries.
What a weird time.
What I’m Listening To While Writing TMD
Hey, alright, it’s Clairo, the pride of Middlesex County with “Sexy to Someone” off her latest album. This video has a Yeti, which is cool, though it would be better if it were a Škoda Yeti.
The Big Question
How you feeling about Volkswagen right now?
I feel the same way I have for years, regarding VW. Boring and bland looking cars, with crappy interiors, and even worse quality. They’ve infected Audi to me as well since whenever I see a new Audi, I feel like I just see a VW with lipstick. Audi doesn’t really look that much different than a VW now to me outside of fancy head/tailights.