Angst in Wolfsburg: What will happen in Volkswagen's home city?

As Volkswagen is forced to spend over $7 billion to recall 11 million cars in the US, VW's hometown of Wolfsburg, Germany, is facing trouble of its own.

The Wolfsburg plant in North Germany is home to the Volkswagen headquarters, as well as more than 73,000 employees who are now fearing for their jobs.

Built in 1938, on Adolf Hitler’s orders to build a "peoples’ car," Wolfsburg today is home to 124,000 residents, half of whom work for Volkswagen. “The whole region is used to being lifted by this company,” Michael Wilkens, head of the local chamber of industry and commerce told Reuters. Thanks to VW, the city 120 miles west of Berlin boasts an unemployment rate lower than the national average, and, in 2013, it was named Germany’s richest city.

But now with Wolfsburg’s fate inexplicably tied to VW’s emissions cheating scandal, the city feels vulnerable.

“The residents are angry, sad and disappointed,” Carsten Steinbach, a Wolfsburg native told The Local Germany. “There is also fear, because it’s our bread and butter.”

Not only is the automaker a major employer, but the entire city acts as an ode to VW. Autostadt, German for “Car City,” is a 16-building museum and visitor center that sprawls over 60 acres and attracts 2 million visitors a year. The AutoMuseum Volkswagen also celebrates all things VW, offering guided tours on the evolution of the iconic Beetle.

“The town owes everything to VW, they have their hands in every project here but that will surely change. Life won’t be the same again,” Frank Schellenberg, who relies on VW’s tourism industry to fund his profession as a local cab driver, told Reuters. 

VW also sponsors Germany’s popular Wolfsburg soccer team and acts as a namesake for local schools and colleges. 

With past Porsche chief Matthias Mueller taking over as CEO for Martin Winterkorn this week, international attention has largely focused on the company’s internal management hierarchy as well as the dim future for diesel cars. 

The mayor of Paris recently announced his plans to ban diesel engines in the city by 2020, and other European countries are rethinking diesel tax breaks. Europe’s response to VW’s diesel scandal could cause a chain-reaction in the auto industry because Europe is responsible for 75 percent of diesel car sales worldwide.

Some experts distrusted VW’s promotion of ‘clean diesel’ from the beginning, because diesel engines have an inherent trade-off. “You have power, you have energy, you have emissions: You get to choose two of them,” Don Hillebrand, former president of the Society of Automotive Engineers, told LiveScience. Obviously, VW did not choose clean emissions.

But regardless of the science and management debates currently surrounding VW, the city of Wolfsburg feels betrayed. “Everyone in Wolfsburg is expecting tough times and job cuts,” says Schellenberg.  

And the impact on VW’s hometown should not be ignored. “If Volkswagen leaves or does badly, Wolfsburg will become a ghost town,” a Wolfsburg resident told The Local Germany.