The effects of the Coronavirus are not yet foreseeable for VW
Keeping distance, driving in sight, slowing the spread of the virus: slowing down is also the order of the hour in the case of Volkswagen in the Corona crisis, with dramatic consequences. The largest car manufacturer in the world will close its European works from Friday and for at least two weeks.
In Italy and Spain the tapes are already silent. The two Audi sites Ingolstadt and Neckarsulm also cease production. VW Group leader Herber Diess is forced to take drastic action because the sales situation has "significantly deteriorated" and the supply of parts of the plants is no longer secure. "The Corona pandemic presents us with unknown operational and financial challenges," he said. "Sustainable economic influences" are to be feared.
This and four of his colleagues on the Board of Directors left a gap between the Stehtische when they presented the balance sheet of the financial year 2019 on Tuesday morning in Wolfsburg. The rest of the group leaders and journalists are connected by phone or online.
Nobody really cares about last year anymore. 2019 is Pre-Corona time, the very last, very successful year for Volkswagen for the time being. Almost all questions revolve around the consequences of the pandemic and how the VW Group can cope with it with its twelve brands, 124 plants and worldwide 670.000 employees (of which 275.000 in Germany).
25 Volkswagen infections
"We are able to work," Diess said. Meanwhile, the virus is also spreading in Volkswagen. 25 Infection cases occur worldwide, says HR Director Gunnar Kilian, three of them in Wolfsburg, where total 60.000 employees are employed. No case was known on Monday. "We work in Task Force mode," Kilian said.
The Director of Labour, former spokesman of the works council chief Bernd Osterloh, stresses that there is close coordination with the workers'representatives on all measures to combat Corona. In fact, there's been some trouble lately. The workers in production complained about their health, as evidenced by a letter from Osterloh to the workers.
While in the office area VW offers for distance due to the Corona epidemic apply, colleagues in production worked closely together. The works council criticised the board of directors for this "two-class society". Management responded to the pressure, and Friday is the last shift. This is too late from the point of view of the works council. "We now expect an orderly exit from production," Osterloh demanded.
Half of operating profit possible
No one knows how to proceed after that. Looking ahead, Diess and CFO Frank Witter are also struggling. This much is clear: the forecast for 2020 (turnover: 6,5 to 7,5 percent) published well two weeks ago is no longer valid. "A view is simply impossible at the moment," said Witter. The severity and duration of the Corona crisis were "absolutely uncertain". 2019, the VW Group has achieved a return on sales of 7.6 per cent, with a margin of 16.2 per cent among the twelve brands Porsche.
The financial board then makes an indication of how massive the deposits are now. In the first quarter, the operating profit would probably have to be halved compared to the previous year. 2019 had earned the group four billion euros between January and March, with a margin of 8,1 percent.
"We must now keep a clear head," said Witter. "We do not want to write off the 2020 year completely." The car manufacturer has a sufficiently thick financial cushion, the net liquidity in the automotive sector is at well 21 billion euros. 2019 Volkswagen has earned 14 billion euros after taxes, with a turnover of nearly 253 billion euros.
China makes hope
Hopefully, the VW board agrees with developments in China, where the government had acted quickly and radically against the spread of the virus epidemic. After the car market practically collapsed in January and February, he is now recovering. "When the crisis is over as quickly as in China, Europe can recover quickly after Corona," Diess said.
VW is a 20-percent market leader in the Chinese market, 40-percent of all group cars are sold in the People's Republic. Although the Beijing Central Government's crisis management was unimaginable in this country, it gave cause for concern. But one could still learn how important swift and decisive action is. The Federal Government is now apparently ready to do so: "We are satisfied with the government's crisis management."(徳囯ASK电容器)