At the end of January, Volkswagen surprised the capital market with a mandatory announcement about the past financial year. “Based on preliminary figures,” there was a “positive deviation” from previous financial plans, the group said. The focus was, among other things, on net cash flow, a key indicator of the company’s financial strength. Instead of close to zero – as recently expected internally and externally – the inflow of funds is now expected to be around six billion euros. The surprising inflow of money is causing unrest in Wolfsburg. Because it affects the compensation of top management. According to the previous planning assumptions, it was actually assumed that no annual bonus would be paid for the past year 2025. With the cash flow now reported, the managers can probably look forward to a payout. This is met with criticism – also because Volkswagen is still in a profound crisis and the specialist departments around CFO Arno Antlitz continue to insist on strict cost programs. “We share the criticism of the group’s previous information policy regarding the six billion euro net cash flow,” said the employee representatives led by works council leader Daniela Cavallo. The resulting lack of understanding among many employees is understandable. There will be a top-level meeting in Wolfsburg this week at which the employee side wants to “make their position unmistakably clear”. Afterwards, they want to make a public statement. No May bonus for employees The compensation of top management is made up of several components, including variable components that are linked to business development. For the annual bonus, one of these components, a certain net cash flow and a specified return on sales are decisive, among other things. While the return target will probably be missed, the cash flow is likely to reach the threshold for a distribution with the new planning. Where exactly the target corridor is will only be known with the annual report. Last year it was between 3.5 and 7.25 billion euros. The development comes at a sensitive time. Because works council leader Cavallo and her union IG Metall are currently in the middle of the election campaign for the upcoming works council elections. Competing groups in the workforce demand that she take a tougher approach towards management. The workforce, in turn, is unsettled by the many savings and has to accept cuts. An example of this is the May bonus, a variable payment that will be suspended this year and next year according to previous agreements.VW board of directors defends itself against criticismCFO Arno Antlitz is now countering the criticism of the surprisingly high cash flow in internally distributed interviews. The most recently reported improvement is “the result of intensive cost work in the areas of inputs – i.e. development and investments – as well as in the management of our inventories,” he is quoted as saying. The work was intensified again at the end of July after the new customs policy in the United States was established and the associated additional burdens became clear. “The dimension of the improvement actually came as a surprise,” explains Antlitz. But the development also shows the potential that can be leveraged if VW works “on cross-divisional, targeted improvements.” More on the subjectAntlitz argues that the group needs a solid inflow of funds “in order to be able to continue to invest powerfully in future technologies.” If the cash flow is not sufficient and there is not enough money left in the till at the end of the year, VW would have to fall back on the substance or raise additional capital. The options for this are limited, he adds – and then adds a note that may have some weight from the perspective of the capital market: “Incidentally, the rating agencies also see it that way.” There has been concern in Wolfsburg for a long time that the group’s credit rating will deteriorate due to the many crises and that financing costs will then rise significantly. The group also points out that the managers are already forgoing parts of their salaries. The total compensation consisting of the monthly fixed salary, annual bonus and long-term bonus for the past year and the new year that has just begun will be reduced by 11 percent. The board members want to make a contribution to the savings. The works council now wants to explain its position in more detail – further details are expected later on Tuesday evening.
Go to Source