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Volkswagen Scandal Casts Pall of Gloom Over Automaker’s Hometown of Wolfsburg

German prosecutors focus on former Volkswagen CEO 0:28

WOLFSBURG, Germany — Workers in Volkswagen's home town of Wolfsburg have been left fearing for their futures after the carmaker was plunged into crisis because of rigged U.S. diesel emission tests.

VW has seen its long established reputation as symbol of German engineering excellence tarnished by a scandal affecting 11 million vehicles worldwide that broke a week ago.

VW employees arriving for work at the company's huge plant in the northern German town on Friday hoped that a new chief executive could start to stabilize the company.

"We need a fresh start, that's why the change at the top is important," said a worker from the project planning department who did not want to give his name, speaking shortly before former Porsche boss Matthias Mueller was confirmed as VW’s new CEO, replacing previous chief executive Martin Winterkorn, who resigned on Wednesday.

However, the worker was worried that the scandal could spread and affect other parts of Germany's motor industry.

"This is just the beginning. In the longer run, jobs could be at risk in the whole German cars sector," said the VW worker.

A town of around 125,000 people, Wolfsburg owes its very existence to Volkswagen. Purpose-built on Hitler's orders in 1938 to make the “peoples' car,” about half the town's workers have a job directly linked to the company.

In VW’s shadow

The brown brick facade and tall chimneys of the main VW plant dominate the Wolfsburg skyline. Self-employed cab driver Frank Schellenberg is reliant on VW for much of his business and is pessimistic.

"Everyone in Wolfsburg is expecting tough times and job cuts," he said. "The town owes everything to VW,” he said. “They have their hands in every project here but that will surely change. Life won't be the same again."

Schellenberg is scornful of the way VW bosses have responded to the crisis.

"They are hiding up in that ivory tower," he said, pointing to the 13-story administrative block on the factory grounds. It is almost impossible to escape the VW influence in Wolfsburg.

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The main shopping street is named after Ferdinand Porsche, whose "people's car" design caught the imagination of Hitler. VW sponsors Germany's top league Wolfsburg soccer club; schools and colleges bear the name of VW or Porsche.

The company produces more sausages for its work canteens and other outlets than it does vehicles, according to German media reports.

The town has sought to reduce its dependence on VW, which also owns Audi, Skoda and Seat, by building up other services. It has promoted itself as a regional tourist center and now has a science museum, art gallery and sports facilities.

Michael Wilkens, head of the local chamber of industry and commerce, acknowledged that the problems at Volkswagen were a setback for the town and surrounding parts of Lower Saxony.

"The whole region is used to being lifted by this company," he said.

But he said there was a determination to turn things around, now that the initial shock had worn off.

"We have seen how proud people are of this company and their attitude is 'Let's put this right'," he said.