Production at Audi in Ingolstadt
The brand has become from the winning machine to the problem case of the VW Group.
(Photo: Audi)
Munich, FrankfurtWhen this Thursday the supervisory boards of Volkswagen come together in Wolfsburg, then the daughter Audi become a topic. The former winning machine is now the largest problem case of the group. Startled by new allegations in the exhaust emissions gap the topic enlightenment Once again on the agenda, it says in the environment of the panel.
On the agenda is also the economic situation. By 5.4 percent the sales by the end of May below the previous year, which was already well below plan. The return on investment, in good years at 30 percent, has plummeted to ten percent.
It is high time to communicate these truths to the employees directly. “Audi needs a liberation,” called CFO Alexander Seitz Audi– Employees at a workplace meeting in late June too.
The sales are dwindling, the margin is under pressure, and the high Investments in digitization and electromobility are far from paid. Seitz and Audi boss Bram Schot push for massive cost savings and significantly leaner production in the parent plants Ingolstadt and Neckarsulm. “Already, the austerity efforts are huge,” says a senior manager. But more should happen.
The pressure weighs on Audi boss Schot, he must deliver: Herbert dies. VWCEO and in personal union chairman of the Audi supervisory board, needs the profits of the premium brand for the conversion of the own business. The basis for Audi’s future is the portfolio planning, which is now finished on the table.
The concept provides for a sharp turn to electromobility, by 2025, every second car sold to have a power drive. “Now the planning for the volume and the occupancy of the plants are running,” says a company spokesman. These cornerstones should be available at the end of July. Subsequently, the negotiations begin with the works council. Audi and its approximately 61,000 employees face serious conflicts.
For the parent plants Ingolstadt and Neckarsulm are so far focused only on the production of cars with internal combustion engine. The E-Tron, the only Audi Stromer to date, is being built in Brussels. How serious the situation in the German plants is, shows the current utilization. While Ingolstadt is reasonably close to the target of just under 80 percent, the situation in Neckarsulm is critical. Last year, only 186,000 cars ran off the line – 300,000 could be. Profitable, the location with its 16,000 employees hardly work.
Ingolstadt is not the cheapest alternative
Audi now hopes for help from the group. Schot and the works councils flirt with models from Volkswagen and Porscheto increase the utilization of their own works. Thus, the Audi A4 and the VW Passat are on the same technical platform. The VW top model built so far in Emden needs a new home, because the location in East Frisia is switched to electric mobility.
The production of the Passat in Ingolstadt would count on Audi. But the plan has a catch: With the planned by Group CEO Herbert Diess in Turkey “multi-brand factory” for Volkswagen and Skoda additional capacities are created within the group. Other locations in Eastern Europe are also eligible for the Passat – Ingolstadt would not be the cheapest alternative.
More complicated is the situation in Neckarsulm: The factory is almost exclusively designed for the construction of the large series A6, A7 and A8. But with the SUV boom sedans and station wagons on the market are less and less in demand, first layers must already be deleted. “Contrary to the assurance given by the Audi Board of Management, no improvement in the situation has become apparent within a year,” complained Audi Works Council member Jürgen Mews at the works council. The employment guarantee runs until 2025.
In the short term, the works council hopes for an SUV model to increase capacity utilization. In the medium term, the solution lies in the switch to electromobility. Audi works together with Porsche on the so-called “Premium Platform Electric” (PPE). On this basis, the two sister companies want to develop sedans and SUVs, which come on the market from 2022 onwards.
Where the common Stromer are built with Porsche, still has to be negotiated. While the works council demands an “electrical” production line for both Ingolstadt and Neckarsulm, Audi and the VW Group have all options open to them.
The hope of the Audianer lies in the distribution of production: While Porsche builds the PPE sedans, Audi in Neckarsulm could take over the common SUV models. Numbers and investment costs would be charged pro rata.
Experiences with such cooperations have already been made: For example, the Audi Q7, the VW Touareg and the bodies of the Porsche Cayenne run through the same factory in the VW plant in Bratislava, Slovakia.
Negotiations with hard bandages
For the three VW brands, this is a highly profitable concept – if the costs and the flexibility are right. Because despite all the optimistic plans, no one currently knows how fast the electric cars are accepted by the customers. A tough struggle is expected between works councils and the Audi leadership.
Works council chief Peter Mosch lays hard bandages even before the negotiations. In an interview with the “Donaukurier” and the “Heilbronner Stimme”, the top employee representative counted Audi CEO Schot. “He’s the right man in the right place right now,” said the deputy chairman of the board over his negotiating partner. Whether this applies in the medium or long term, “that will show itself when the contract talks are pending”.
Schot lives with the stigma of being just a compromise candidate. According to reports, this would have been preferable to financial director Seitz when Rupert Stadler was arrested in July 2018. But Mosch and his works councils have preferred the more pleasing sales director Schot to the perhaps tough restructuring company Seitz.
Meanwhile, the Dutchman has earned the respect of the family Porsche / Piëch, the largest VW shareholder. The family was impressed by Schot’s presentation on electromobility, according to their environment.
Nevertheless, Diess keeps an exchange open at the top. He still hopes for Markus Duesmann. The former BMWPurchasing Board had quit a year ago in Munich and declared his move to the VW Group. Thereupon has BMW Duesmann with a two-year competitive ban.
Hildegard Wortmann, on the other hand, is different: the former BMW marketing manager took over the sales department in Ingolstadt last week. If you manage the turnaround in sales, the employees in Neckarsulm and Ingolstadt are worried about many things.