Volkswagen Slips Into Reverse

It has been a rough ride for Bernd Pischetsrieder since the former BMW boss took over as chief executive at Volkswagen in April, 2002. VW's share price has fallen nearly 50% since then, wiping out $11 billion in market capitalization as profits plummeted at the $150 billion company.

On July 23, Pischetsrieder delivered more bad news -- a 36% net profit drop in the first half of 2004. Profits for all of 2003 were already down by more than half, and just to take even more air out of VW's tires, the boss issued a grim earnings warning for this year. In three years -- just half a model life cycle in the auto biz -- the world's fourth-largest carmaker has gone from Europe's showcase turnaround to major-league laggard.