New York, Pittsburgh With its withdrawal from the Argo AI joint venture, Volkswagen risks losing software experts. Employees of the company, which the Dax group operated jointly with Ford, report increasing frustration with VW’s dealings with them. According to internal figures that the Handelsblatt was able to see, Ford is significantly more successful in retaining sought-after talent.
At the end of October, the automotive companies had sealed the end of Argo AI. The company developed software and hardware for fully autonomous vehicles (called Level 4 in industry jargon). But recently doubts had grown as to whether Argo could achieve rapid success and break even. When a planned entry by Amazon failed in the spring, Ford and VW could not agree on further financing.
Argo was worth more than $7 billion at its peak and had over 2,000 employees. The majority worked in Pittsburgh and Austin, in Munich Argo employed more than 280 people. Among them are many software engineers, programmers and experts in artificial intelligence (AI) – talents that are desperately needed in the automotive industry.
>> Read about this: VW and Ford are losing a lot of money as a result of the Argo exit – tough times are ahead for the robotaxi industry
Top jobs of the day
Find the best jobs now and
be notified by email.
Shortly after the announcement that it would write off the Argo investment, VW made a generous takeover bid. “We are pleased to announce that your employment relationship will not be interrupted,” the German employees were told in an internal memo. VW plans to take over the German Argo company.
The move may have been well intentioned. However, frustration prevails among the employees docked at VW. Internal meetings went without concrete information, high-ranking VW managers were hardly to be seen, not even CEO Oliver Blume. And there is hardly any work after the Argo end. A double-digit number of talents have already quit.
Lack of communication
“We sit around,” complains one developer. “VW leaves us hanging in the air.” Another employee says: “We should develop autonomously driving cars. But our software no longer interests VW. And what we should work on next is unclear.”
As a result, the employees will be missing interesting tasks for the foreseeable future. Some developers are to test the software of the new VW partner Mobileye from Israel in the future. Others could be used in projects by VW Commercial Vehicles and the VW software subsidiary Cariad. For many it means: twiddle your thumbs.
>> Also read: flowers Liberation – The VW boss collects the software strategy and reorganizes the group
“We have been told that the integration should be completed by early June. Nobody understands why it takes so long,” says a software engineer. In the meantime, helping out as a jumper is not very attractive. And the prospect of starting at Cariad doesn’t appeal to the Munich team either: the software subsidiary is considered second-rate in the industry.
Fast takeover at Ford
The situation in the USA is different. Ford has here – typically American – acted radically and quickly. The US automaker fired half of the workforce directly. Above all, business positions and employees in the operation of the test vehicle fleet lost their jobs.
On the other hand, things went well for most of the software engineers, and a takeover offer was made to them. According to Argo circles, 85 percent accepted the offer, which means that more than 500 people switched to Ford.
“The mood is quite good,” says an employee in Pittsburgh. “Of course we were disappointed. But Ford quickly came up with a plan.” Instead of Level 4, work is now being done primarily on the assistance systems for Ford’s Level 3 projects.
By mid-January, all developers should receive a follow-up task in the Ford group. According to corporate circles, they can stay in Pittsburgh. An important sign: Ford CEO Jim Farley came by personally.
The situation is different at VW: According to this, only 60 percent of the offers in the USA were accepted, so that a total of fewer than 40 US experts switched to VW.
Sought-after experts
In Munich, meanwhile, the mailboxes of the German employees are overflowing. “I have inquiries from Apple, Nvidia, Tesla, Cruise and Daimler,” says one. New ones come in every day. “Some HR managers say: ‘Bring your whole team with you.'” The establishment of a new location in Munich is also conceivable for some competitors, as e-mails received by the Handelsblatt show.
Most of the colleagues he knows are in the application process, says another employee. Layoffs are the order of the day. “I don’t think many will end up at Cariad. Anyone who gets good offers leaves.”
Observers are not surprised by the demand. “There are too few software engineers, but there is a great need for these experts worldwide, which will triple by 2030,” says Christian Koenig. The car expert has worked for Porsche in North America and runs an e-mobility consultancy in Atlanta.
Ford quickly realized how important it is to retain this talent and “quickly deployed the Argo employees elsewhere”. The market registers that Wolfsburg does not seem to act as quickly and empathetically with its people: “Headhunters are just waiting for that.”
reorganization of the group
A VW spokesman explains: “Volkswagen is working with Argo AI in the USA and Germany to enable employees to continue working.” They have initiated an “orderly process”, are waiting for “antitrust approval” and want the employees at the ” most promising projects in the field of autonomous driving”.
Group circles say that the US employees should primarily end up at VW Commercial Vehicles, where Level 4 development is being pushed. The Munich employees are said to work primarily for Cariad, where Level 3 systems for private cars are being developed.
Two staff meetings have already been held and it is hoped that the takeover of the German Argo company will be completed in June. Until then, the developers should be kept busy with more than 80 commissioned works.
A Ford spokeswoman said: “We are proud that hundreds of Argo AI employees have decided to join our mission of bringing automated driving to millions of customers. We can confirm that the team will initially focus on developing a Level 3 autonomous system.” An Argo spokesman declined to comment.
More: VW and Ford are losing a lot of money as a result of the Argo exit – tough times are ahead for the robotaxi industry