Volkswagen has a special position in the industrial relations system in West Germany and among its automobile manufacturers. This chapter describes how the special position affects the rationalisation policies pursued by Volkswagen in two key areas. It considers how the highly professional, co-operatively orientated system of industrial relations which has emerged at enterprise level facilitates and limits rationalisation. The chapter also considers the durability likely of this system in the face of the growing problems which can be expected in the future. Within the Federal Republic the VW corporation comprises two independent companies: Volkswagen-AG with over 120,000 employees in 1982 and Audi (Audi-NSU-Auto-Union-AG) with more than 30,000 employees. VW has a special position among West German car firms because of its special product and locational structure, its special public character, and its special industrial relations structure. All three features largely stem from VW's origins in the Nazi period as a central "project" of National Socialist economic and social policy.