Updated 10.00
THE VOLKSWAGEN SCANDAL has shocked all of Germany but the city of Wolfsburg are especially concerned for what the future brings.
Home to the headquarters of the company, the football club are owned by the motor giant and have received mass investment yearly.
Now there’s widespread fear the team that finished as Bundesliga runners-up last term will face financial problems amid an inevitable cost-cutting exercise by their overlords.
The initial response from the club has been positive though it’s impossible to be so certain of anything with the fall-out of the scandal still to be properly measured.
Vokswagen have set aside 6.5 billion euro to deal with the crisis though with potential lawsuits and fines, it’s seen as a widely optimistic figure.
VW were found to have cheated on their diesel emissions testing in the US, using special devices to change the performance when being examined.
And the football side of the company’s operations could be an easy way of saving money.
Speaking to Reuters recently, Simon Chadwick – Professor for Sport Business Strategy and Marketing at Coventry University, said Wolfsburg will be affected.
“You imagine they will now be looking to strip away cost and inevitably sport will fall in the spotlight. If the kinds of figures talked about (what Volkswagen has already set aside) are accurate, this has to have ramifications for financial performances and the management of the business.”
Still, the official line from the club is a positive one.
Sporting director Klaus Allofs spoke to Die Welt last weekend.
I can’t say anything concrete about the operations at Volkswagen, but in general the signals are clear: as things stand now, nothing will change for VfL. We don’t get direct hand-outs from Volkswagen, but a strategic element.
We’re neither Number One on VW’s priority list, nor last, and the financial size of their investment, in terms of the whole VW group, is certainly not small. On the other hand, their emotional involvement (in the club) is huge, which is why I am not worried. That’s not a calming tactic, but what I firmly believe.”
Chadwick agrees with the likelihood of the company retaining a relationship with the club because it ultimately makes for good business practice.
“One of the things football is good at doing is to engage fans and to create a bond with people who will ultimately buy your cars”, he said.
The other argument is that VW is so deeply embedded in German national culture, it would be difficult to extricate itself from its relationship with clubs. To desert teams or communities would be counter-productive and would further damage the brand.”
On the pitch, it seems Wolfburg are still struggling to come to terms with what’s happened to their city.
They started the season brightly but were thumped 5-1 by Bayern and then drew 1-1 at home to Hannover last weekend.
Another bad result against Manchester United in the Champions League group stage last night certainly hasn’t helped the current mood at the club.
