Volkswagen power plant in Wolfsburg, Germany.AXEL SCHMIDT/Reuters
Like many others in this prosperous city, André Pichiri grew up in the shadow of Volkswagen. His parents both worked at the auto maker's sprawling factory and headquarters on the Aller River. As a university student, he had a lucrative summer gig on the assembly line putting fabric on car seats. He took satisfaction in the company's reputation for high-quality vehicles and its attention to the environment.
Then, late last month, came the crisis that could change Wolfsburg forever. In its pursuit of sales, Volkswagen deliberately disguised the true extent of harmful emissions from 11 million of its diesel vehicles. "In the early days, the shock was tremendous," said Mr. Pichiri, who is now an editor at the local newspaper. For people like his father, a proud retired Volkswagen employee, it was even worse. "For him, it was a catastrophe."
Nowhere is the impact of the emissions scandal more profound than in Wolfsburg, the city that Volkswagen built – literally. Founded in 1938 to house auto workers, the city's past and future are inextricably linked to the company. Now, some residents worry that Wolfsburg's reliance on the auto maker could be its undoing.
Faced with the scandal now enveloping Volkswagen, there is fear, anxiety and a sense of betrayal in Wolfsburg. More recently, there is also a surprising degree of solidarity as residents rally behind the company and blame a small minority for the wrongdoing.
"We are very scared about what will happen," said Esther Buchinsky, who has lived in Wolfsburg for two decades and owns a candy shop downtown. Her radio is tuned to the local station, which has broadcast a non-stop stream of news about the scandal – or the "Exhaust Affair" as it is known here – since last month. "It's a good company, but some little group is destroying everything," Ms. Buchinsky said.
Volkswagen is more than the largest employer and taxpayer in this city of 120,000 people. It supports schools, sports clubs, charities and arts initiatives. There is a Volkswagen Arena, a Volkswagen Bank and a Volkswagen real estate agency. On one side of the canal dividing the city sits the enormous Volkswagen production complex, which is so large that all of Monaco could fit inside. Next to it stands the Autostadt – or Car City – a gleaming Volkswagen theme park that welcomes more than two million visitors a year.
Faced with the crisis at the car maker, Wolfsburg Mayor Klaus Mohrs announced the city was halting spending on all new projects and instituting a hiring freeze. He delayed the introduction of the municipal budget by two months and warned some city projects would have to be shelved.
Wolfsburg has its roots in the decision by the Nazi regime to build a "people's car," or Volkswagen. In the late 1930s, the village of Fallersleben was chosen as the site for the new factory and housing for its workers. During the Second World War, the plant used forced labourers to produce military vehicles and airplane parts. After the war, the factory manufactured what would become the iconic Volkswagen Beetle.
Today, the Volkswagen Group comprises a portfolio of different brands – including Volkswagen, Audi, Skoda, Porsche and Lamborghini – and employs 600,000 people worldwide. More than a 10th of them work in Wolfsburg itself and about half are in Germany.
"Everyone is mad at those who caused the Exhaust Affair," said Hartwig Erb of IG Metall in Wolfsburg, a union with 89,000 members, more than half of whom are employed by Volkswagen. "They are disappointed and feel betrayed."
Alongside the anger and concern, however, there is also the knowledge that the fate of Volkswagen and its workers are one and the same. Ahead of a meeting last week of thousands of employees, IG Metall printed 10,000 T-shirts bearing the Volkswagen logo and the slogan "One Team, One Family."
At the east gate of the Volkswagen complex on a recent afternoon, employees streamed out of the factory heading for home. None were willing to speak on the record to a member of the media. "It's not a good feeling, of course," one tall, grey-haired man said when asked about the mood at the company. He declined to elaborate further.
"The problem is the costs," another man said with a heavy sigh. "No one knows how much [the scandal] will cost."
Volkswagen has already set aside €6.5-billion ($9.6-billion) to deal with the crisis, but that figure is considered a starting point, not a total.
Nearby at the Autostadt, it's possible for a moment to believe the scandal is far away. The complex is a monument to Volkswagen engineering where visitors can tour the factory, take test drives, eat gourmet pizza and buy dark chocolate in the shape of a Volkswagen Beetle. It has its own Ritz-Carlton Hotel. In an unusual piece of theatre, buyers can pick up their shiny new vehicles from two circular glass towers where cars are stacked in layers by a robotic elevator.
But even here, the long-term damage caused by the emissions crisis can be felt. Walking with two friends among the manicured lawns and water features, Yana Dimitruk, a teenager from the Netherlands, explained semi-apologetically that she had planned a visit before the news broke. "I probably will never buy a Volkswagen," she said. "I can never trust them."
Among Wolfsburg residents, there is a sense that, with grimmer times ahead, the city needs to pull together. Last week, the Wolfsburger Allgemeine, the local newspaper, ran a front-page story with the headline "We stand with Volkswagen," featuring messages from 37 locals together with their photos. In one typical sentiment, Antony Spatola, 37, a kickboxing trainer, said he supports the company because without it, "there would be no prosperity in this city."
Local businesses have added their voices to the chorus. Ehme de Riese, an optician with three outlets in Wolfsburg, took out a full-page ad in a newspaper signalling his solidarity with the company. "In spite of many efforts to create its own identity, our city naturally depends on the success of Volkswagen," said Mr. de Riese, who has 10 relatives working for the company. "If VW is not doing well, everyone in Wolfsburg suffers."
Meanwhile, some residents are venting their anger on other targets – toward the U.S. authorities and America's culture of litigation, toward the media, or toward what they perceive as a double standard. At a bus stop, a man who said he has driven a Volkswagen Golf for 19 years pointedly questioned Canada's own environmental track record.
For Mr. Pichiri, the editor, the dilemma is how to cover the biggest story in Wolfsburg's history without alienating readers. "People say, 'Okay, let the guilty people be punished, but stop writing all this stuff,'" he said. A few days ago, a friend of his at the company confronted him with a question: "Can you imagine how badly I feel when I read the newspaper?"