The first German industry is at a standstill. One after the other, the major German car manufacturers have announced the closure of their assembly lines. A high social risk maneuver in a sector on which more than 840,000 jobs depend. Initially, 200,000 people are put on compulsory leave or invited to use their “time credit”.
The manufacturers are negotiating with the staff representatives, site by site, for a partial layoff for the rest. Not without gnashing of teeth. VW or Daimler works councils are beginning to question the “contribution” of their management and the reduction of their bonuses, reports the German press.
Audi and Daimler on break
Volkswagen boss Herbert Diess launched the fallback movement at his annual virtual press conference for employee health and “given the current significant deterioration in sales and the uncertainty looming in the parts supply ”.
Volkswagen, Audi, Skoda, Porsche, MAN… In total, 80,000 employees of the VW group are laid-off until April 9. Herbert Diess however still hopes to release his first 100% electric model, the ID.3 for the summer.
Daimler suspended production until April 17, for passenger and commercial vehicles. Only emergency operations and customer service remain on deck. Management “will take additional measures if necessary”, explains the group.
Same story at BMW, which closed until April 19 five factories in Germany, two in the United Kingdom and one in Austria. In Germany, BMW has already concluded a company-wide agreement to guarantee at least 93% of the net income of partially unemployed employees. The system adopted by the government currently covers 80% of income.
Conti and Bosch follow
Subcontractors who stuck out their tongues to follow the conversion of the German automobile to electric motors are drawn into the movement. Continental, already in a storm before the epidemic , tried to resist until the last moment. The tire giant finally had to resign on March 18 to reduce “temporarily production to zero in some cases” in consultation “with customers and suppliers”. After stopping in France, Italy and Spain, Bosch also pressed the pause button at 35 locations in Germany from March 25. Mahle is closing 70 sites in Europe and Schaeffler must close 17 of its 52 factories.
Daimler or VW ready to restart
All remain discreet about the financial impact of neutralization. The VW boss reminded Friday that the group spent 2 billion euros per week, and warned that the crisis could lead to the loss of jobs. According to the Financial Times, the group even called on the ECB to speed up short-term debt buyouts.
All also hope to be ready for restart with Chinese demand . “Day after day, demand is picking up” at a normal pace in China, notes Daimler’s boss Ola Källenius in an interview with the Handelsblatt. At the height of the crisis in China, Daimler pre-produced its new S-Class in Germany to be ready to ship it to Asia. VW is preparing a “package of measures” to resume production safely, says Andreas Tostmann, production and logistics manager for the Volkswagen brand.
However, after closing the borders in Poland and the Czech Republic in particular, the German Federation of Manufacturers (VDA) is worried about supply “if production were to actually restart”. “We need uniform decisions in Europe for a reasonable ramp-up after the crisis has passed,” argues VDA President Hildegard Müller.