Sep 30, 2024
Volkswagen | the first to close the German factory, cancel the promise of no layoffs, the situation is tense!
[News] Volkswagen | the first to close the German factory, cancel the promise of no layoffs, the situation is tense! Under the pressure of fierce competition from China's electric vehicle industry, the world's number two automaker - Volkswagen Group is now facing unprecedented challenges. The Volkswagen Group is evaluating the possible closure of its plants in Germany. The chief financial officer of the Volkswagen Group, Arnaud Antelitz, is scheduled to address employees at a works council meeting on the morning of September 4, along with the CEO of the Volkswagen brand, Thomas Schaefer. Although shares in the Volkswagen Group rose on the news, rising 1.2 percent, they have lost nearly a third of their value over the past five years, making them the worst performer among major European automakers. Earlier, analysts had expected that Volkswagen Group might consider closing its plants in Osnabruck, Lower Saxony, and Dresden, Saxony. It is worth noting that Lower Saxony is also one of the important shareholders of the Volkswagen Group. "The circumstances are too serious to address the challenges we face with simple cost-cutting measures," Mr Schaefer said bluntly in his public statement. He stressed that the Volkswagen Group is feeling increasing price competition pressure from Chinese rivals. Antelitz also added that as the results of the first half of 2024 did not meet the company's expectations, the group will need to take more stringent cost-cutting measures in the second half of the year in order to meet its annual targets. The Volkswagen brand will be the first to implement cost cuts, aiming to save up to 10 billion euros, or about 78.6 billion yuan, by 2026. In addition, while considering plant closures, the Volkswagen Group may have to abandon its 30-year no-layoff policy. The looming crisis PART 1 The announcement of the possible domestic plant closures comes a month after Volkswagen Group released a poor financial report for the first half of 2024. Although the company officially described it as a "stable performance in a difficult environment", it actually hid a lot of crises. In the first half of 2024, the Volkswagen Group's revenue reached 158.8 billion euros, equivalent to about 1.25 trillion yuan, an increase of 1.6% compared with the same period last year. However, its operating profit was only 10.05 billion euros, or about 79.14 billion yuan, down 11.4 percent from the same period last year. The operating margin also fell by 1 percentage point from 7.3 per cent to 6.3 per cent. Pretax profit was 10.16 billion euros, or about 80 billion yuan, down 14.6 percent from a year earlier; Free cash flow from the automotive business was 4.99 billion euros, or about 39.28 billion yuan. The decrease in vehicle sales is the main reason for the decline in the results of the Volkswagen Group in the first half of 2024: in the first half of the year, th...
View details