VW’s production shutdown costs $2.2b per week, says CEO

Bloomberg

Volkswagen AG’s unprecedented move to halt output on both sides of the Atlantic costs the world’s largest automaker $2.2 billion per week, and CEO Herbert Diess said decisive action is critical to overcome the coronavirus pandemic.
Sales outside China have effectively come to a standstill, while demand in the country, VW’s largest single market, has clawed back to about 50% of pre-crisis levels, Diess said during a panel discussion broadcast by ZDF.
VW can endure the factory shutdowns in Europe and the Americas for several weeks, “but not indefinitely,” Diess said. The company is in a strong financial position, but he didn’t rule out “structural measures” if the crisis drags on for many months or even years in a worst-case scenario.
“Even for the financially strong company Volkswagen, the current exceptional situation represents an acute economic danger,” Diess, Chairman Hans Dieter Poetsch, and works council chief Bernd Osterloh said in a joint letter to workers. Last year, VW generated 50 million euros in profit daily, money that’s “urgently needed” to fund investments in new technology and products, they added.
Recouping incurred losses will be difficult and take a long time, “much longer than the coronacrisis itself. And with every crisis day, it’s becoming more difficult,” the top executives said in the letter seen by Bloomberg.
In a separate interview, chief financial officer Frank Witter said that, as things stand, VW won’t need financial support from the German government, beyond tapping into cash for employees on short-time work.