Volkswagen (VLKAY)

As of September 2008, 173,879 of Volkswagen's workforce of 373,406 were employed in Germany. Strong union organization and strict labor laws in Germany make it difficult to layoff workers and ensure they receive generous compensation and benefits. While possibly helpful for positive morale, Germany's rigid labor market will be a challenge for Volkswagen during the global economic downturn, as the company will find it difficult to reduce costs and production to meet demand.

Volkswagen needs to do more in terms of changing its focus from Europe to other markets such as the US and Asia which are significantly larger and growing at much greater rates. Volkswagen alreday has so large of a foot hold in Europe that it might be reaching its peak and has very little room for growth there. Resources spent on new plants and incentives in Europe would be better spent elsewhere.

VW recalled 15,902 Routan Minivans that were built by Chrysler on June 11. The VW recall still comes in a time when the Toyota recall is fresh in car buyers' minds. As a result, there has been widespread stigmatization for companies that chose to recall cars. VW is recalling these 2009 Routan minivans over a possible wiring problem which could lead to fire. The immediate effects of these issues are still not yet known, but is certain to create a negative outlook for VW stock.