With a hard one Austerity program, job cuts and electric cars Audi boss Bram Schot wants to get his company back on track after a very weak year. But “2019 will be a transitional year,” said Schot on Thursday in Ingolstadt. Sales and sales should rise only slightly.
The conversion “will not be comfortable, but we put the profit zone before the comfort zone,” said CFO Alexander Seitz. Schot had already said 90,000 AudiEmployees are too much. He did not want to mention numbers for downsizing on Thursday. In the next weeks negotiations with the works council. There is “a little fat here and there”.
For the 61,000 Audi employees in the parent plant in Ingolstadt and Neckarsulm in the Federal Republic of Germany until 2025 a protection against dismissal applies. Seitz said, “When colleagues retire, we put the replacement needs to the test.”
The size of the workforce is also to be scrutinized: In discussions with the works council, “the number of direct and indirect employees taking demographic development into the limelight” and “the exact assignment of vehicle projects and work assignments” are to be examined “Optimizing production capacities on a site-specific basis”.
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With 1.8 million cars behind Mercedes and BMW fell behind
Last year, Audi had sold only 1.8 million cars because of problems with the conversion to the new exhaust gas standard WLTP, falling far behind Mercedes and BMW. Sales fell to 59.2 billion euros, operating profit plummeted by 24 percent to 3.53 billion euros. Diesel retrofits and the fine imposed by the Munich legal system for manipulating exhaust emissions hit 1.2 billion euros. “We are far from satisfied with these numbers,” Schot clarified.
In order to become more profitable, he wants to cut jobs, thin out the middle management, scrutinize shifts, allowances, model and engine variants, redistribute tasks between the plants and make greater use of common platforms with VW and Porsche. The all-electric Q4 e-tron will be rolled off the production line at the VW-Elektro-Zwickau plant next year. “If all locations are electrified, that’s not the most efficient way,” said Schot. By 2022 Audi will save a total of 15 billion euros in order to handle the high investment in electric mobility.
Porsche demands higher profitability from Audi
The Ingolstadt and Neckarsulm factories are feeling the WLTP gap and the ongoing trend towards city SUVs at the expense of limousines. Only the small Q2 is built in Ingolstadt, all other SUV models come from Mexico, Bratislava and Brussels. The SUV models account for around 40 percent of Audi sales. Seitz said that Audi is resolving historically grown double structures, developing more efficiently and detoxifying its portfolio. Audihabe already every third engine-transmission variant deleted.
The VW owner family Porsche had demanded last week, Audi should be profitable again. The fact that things are going badly is also felt by the employees in terms of their profit sharing: for a skilled worker at Audiin Deutschland, they drop by 1100 to 3630 euros.
Unlike BMW and Mercedes, Audi currently can not deliver a single hybrid because of the WLTP problems. Only in April, all model variants are available again, said Schot. However, WLTP problems weighed on the first half of the year. Audi did not pass the “stress test” here. Further burdens in the current year are high start-up costs for new models, the more difficult economic situation and high investments in electric cars.
30 hybrid and electric models by 2025
From 2023, Audi wants to offer twelve, from 2025 to around 30 hybrid and all-electric cars. The first all-electric Audi, the large SUV e-tron from the plant in Brussels, is just in the trade and will be extremely well received, said Schot. Customers switched to electric cars faster than expected. However, the big wave will come in three or four years, then Audi will “reap the benefits,” said Seitz.
Claims for damages by Audi diesel buyers as well as a possible antitrust penalty by the EU due to collusion with other manufacturers could still burden the VW subsidiary. The prosecutor Munich continues to investigate not only against Schots predecessor Rupert Stadler, but also against a reigning Audi board.
After Stadler’s arrest last June, Schot took over Audi’s management and is now drastically expanding its savings and electrification plans. Thus, Audi is in line with the VW Group, which also cuts jobs at its core brand VW and invested heavily in e-cars – also with a view to China, where Volkswagen and Audi sell more than a third of their cars. In China, Audi is the market leader in top-of-the-range cars, where the VW subsidiary intends to boost its sales from 660,000 to 2022 to one million cars today.
la / dpa