While not unexpected, the bleak financial picture showcased the myriad headwinds Germany’s flagship automaker faces as it struggles to remain competitive in the transition to electric vehicles. Not helping is an economic downturn at home, leading to lower demand as consumers pull back on big expenditures, plus a slowdown in China — its largest single market.
The results “demonstrate the urgent need for action in the volatile environment characterized by intense competition. This is why we are facing important and painful decisions that we need to make together and to bear together,” Arno Antlitz, the group’s chief financial officer, said in a call with investors.
VW announced earlier this week it could close three German plants, along with cutting salaries by 10 percent. Audi, meanwhile, said it will be shuttering its Brussels factory in February of next year.
Unions are pushing back.
The IG Metall union has called on VW to hold talks on the future of all its factories. Thorsten Gröger, IG Metall district manager for Lower Saxony, told German media that otherwise the union would “have to plan for further escalation.”
VW wasn’t the only bad news for the German economy. Chemicals giant BASF said its results would come in at the bottom end of predictions, blaming the slump in the automotive and farming sectors.