Münchau : Let Volkswagen go bankrupt

Writing in Der Spiegel, the financial journalist Wolfgang Münchau believes that the lawsuits and financial penalties arising from Volkswagen's  software deception scandal will ultimately drive the giant automaker into insolvency. Rather than the German government bailing out VW, however, Münchau proposes to let the company go bankrupt and use the funds instead to invest in new automotive technology:

Anstatt Hunderte Milliarden für die Rettung von VW auszugeben, könnte der Staat mit einer mittleren zweistelligen Milliardensumme eine Technologie fördern, um die wir sowieso nicht herumkommen. Und für dieses Projekt stünden genügend qualifizierte Arbeitnehmer zur Verfügung: die große Menge der Mitarbeiter von Volkswagen, die eben nicht mit dem Betrug in Verbindung stehen. Damit könnte man VW in ein geordnetes Insolvenzverfahren verabschieden - wenn es notwendig würde.

("Instead of spending hundreds of billions to save VW, the government could support a new technology with a double-digit billion investment - a technology which is in any case inevitable. And there are plenty of sufficiently qualified workers available: the majority of the employees of Volkswagen, who had nothing to do the massive fraud. Then VW could go through an orderly bankruptcy proceeding - if it becomes necessary.")

Great idea, since the VW brand is damaged for the foreseeable future.  And the company will have to drain its reserves to cover the recalls and the avalanche of litigation it already now faces - resources that could have been used for research and development. '

Great idea, but it will never happen.  As we saw in the US auto industry, such a proposal would be political suicide.