[zmb_]

During my academic career I worked at a top German research university and advised multiple of these projects. On the surface it’s a good deal for everyone: the professor gets increased publication and graduate counts without having to pay for it, the company gets a top student working on their research problem very cheaply, and the student gets a PhD, an employment contract, and often a visa.

The reality was unfortunately often not so great. What would happened is that the student would get 3-4 year contract with 50% allocation to the PhD research in addition to normal employment duties. That is not enough to graduate if the professor has high standards.

As a result, the student would transition to full time employment after the 3-4 years, try to work on research in the evenings, and give up after some time. Or they would graduate with a very low quality degree (I saw students graduate with a 0 or 1 publications and a very thin dissertation) that has practically no value to anyone beyond providing the student with a Dr. title.

In the end I was actively advising students against it, and to just go into industry with a masters degree or find a fully academy funded PhD position if they are serious about research.

[raphman]

I guess it depends. While doing my PhD at a top German research university, our chair advised multiple of these projects, too (e.g., BMW, Siemens, Audi).

Yes - the downsides you mention are all true. But similar downsides apply to most PhD students working directly at the university - either you have some teaching load and administrative duties, or you work in an externally funded project and have to write project reports and do a lot of non-research stuff, too.

As I mentioned elsewhere in the thread, if you want to have an academic career, doing a PhD in industry is not the best choice. But if you want to work in R&D or as a group leader in industry, these PhD positions might be a good stepping stone.