Volkswagen Burning Through $2.2 Billion a Week as CCP Virus Halts Production: CEO
Volkswagen may have to cut jobs if the CCP virus pandemic is not brought under control as the carmak..
Volkswagen may have to cut jobs if the CCP virus pandemic is not brought under control as the carmaker is still spending about 2 billion euros ($2.2 billion) a week, Chief Executive Herbert Diess told German TV channel ZDF.
The Epoch Times refers to the novel coronavirus, which causes the disease COVID-19, as the CCP virus because the Chinese Communist Partys coverup and mismanagement allowed the virus to spread throughout China and create a global pandemic.
Diess told the Markus Lanz talkshow that the German company, which employs 671,000 people worldwide, was not making any sales outside China and was looking for ways to resume production elsewhere that wouldnt endanger its staff.
“We need to rethink production. The discipline which we had in China we do not yet have at our German locations,” he said.
“Only if we, like China, Korea or other Asian states, get the problem under control then we have a chance to come through the crisis without job losses. It requires a very sharp intervention,” Diess said.
Demand in China is picking up again but production is only at half the level prior to the crisis, he said.
Volkswagen, the worlds biggest automaker by vehicle sales, has 124 factories around the world of which 72 are in Europe, with 28 in Germany alone. It suspended production in Europe earlier this month because of the pandemic.
Volkswagen was working on ways to resume manufacturing with workers maintaining safe distances from one another, including by stepping up hygiene and disinfecting, Diess said.
“We are not making sales or revenues outside of China,” Diess, adding that Volkswagen still had to cover a high level of fixed costs of “around 2 billion euros a week”, he told ZDF late on March 26.
The carmaker, which owns the Audi, Bentley, Bugatti, Lamborghini, Porsche, Seat, and Skoda brands, sold 10.96 million vehicles last year. It also makes Ducati motorbikes as well as MAN and Scania trucks.
Pressure on Refinancing
VWs Chief Financial Officer Frank Witter called on the European Central Bank (ECB) to accelerate purchases of short-term debt, the Financial Times reported on Friday.
He said the ECB should send “clear signals” and purchase the short-term debt, which often matures in as little as six or nine months, “as soon as possible.”
The ECB said last week it would prop up markets, including through the purchase of commercial paper, as part of a 750 billion euro plan ($826 billion) to boost asset purchases to contain the financial fallout from the CCP virus.
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