Autos

Chris Bryant is a Bloomberg Gadfly columnist covering industrial companies. He previously worked for the Financial Times.

It's as if the diesel emissions scandal never happened.

Volkswagen AG said on Thursday it has expanded its workforce by 2 percent since the start of the year, bringing total headcount to 624,000.

That would make the German carmaker the world's fifth largest publicly-traded employer, according to data compiled by Bloomberg  .

Crowded Company
Volkswagen is one of the world's biggest publicly-traded employers
Source: Bloomberg
Excludes state-owned firms like China National Petroleum Corp or State Grid as well as public sector organizations like the UK National Health Service. McDonald's, a big employer, didn't make the list because franchise employees weren't counted. VW count is as of the end of the third quarter. All other figures are from the last annual filing. Headcount may have since changed.

It's great that VW creates lots of jobs, of course. Its Audi subsidiary just opened a brand new plant in Mexico, employing some 4,200 people.

But no other carmaker makes the list of the world's 15 biggest employers. VW's position isn't sustainable, nor is it healthy.

VW needs to slim down. Rivals are much more productive. GM and Toyota make a similar number of vehicles with far fewer people.

Employee Heavy
VW has more employees than Toyota and GM combined, but each makes a similar number of cars
Source: Bloomberg
VW also has a big truck-making operation and builds lots of components in-house.

VW's core brand suffers from far weaker operating margins than French peers such as Renault.

German Inefficiency
Volkswagen's core car brand is far less profitable than French rivals
Source: company reports
French carmakers don't report earnings every quarter, so data aren't directly comparable. Shows automotive division profitability, where applicable.

And those competitors haven't had to set aside more than 18 billion euros ($19.6 billion) so far to cover legal and compensation costs linked to the diesel emissions scandal.

Worse still, some 45 percent of VW employees are in high-cost Germany. But that market accounted for only 13 percent of car sales in the year to date. 

VW suffers from an entrenched labor union that makes compulsory layoffs impossible. When the VW brand boss Herbert Diess dared to suggest the workforce needed to shrink earlier this month he got booed.

It's crazy that VW has as many employees as ISS A/S, G4S Plc and Compass Group Plc, companies that provide armies of cleaners, security guards and catering staff. 

Diess is right. VW needs to cut the fat.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. We compared VW's third-quarter employee count with other companies' latest annual filing. Not all companies give an employee count every quarter. It's possible other companies have added lots of employees recently too.

To contact the author of this story:
Chris Bryant in Frankfurt at cbryant32@bloomberg.net

To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net