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Volkswagen burning through $2.2 billion a week as coronavirus stops production

Volkswagen may have to cut jobs if the coronavirus pandemic is not brought under control as the German automaker is still spending about 2 billion euros ($2.2 billion) a week, CEO Herbert Diess informed German TV channel ZDF.

Diess informed the Markus Lanz talkshow that the German company, which hires 671,000 people globally, was not making any sales outside China and was finding for ways to restart production elsewhere where their staff wouldn’t be endangered.

“We need to reassess production. The discipline which we had in China we do not yet have at our German locations,” he stated.

“Only if we, like China, Korea or other Asian states, get the problem under control then we have a opportunity to come through the crisis without job losses. It needs a very sharp intervention,” Diess stated.

Demand in China is picking up again but production is only at half the level compared to what it was before the crisis, he stated.

Volkswagen, the world’s biggest automaker by automobile sales, has 124 plants across the world of which 72 are in Europe, with 28 in Germany alone. It halted production in Europe earlier this month because of the virus.

Volkswagen was finding out ways to restart manufacturing with employees maintaining safe distances from one another, and also by stepping up hygiene and disinfecting, Diess stated.

“We are not making sales or revenues outside of China,” Diess, adding that the automaker still had to cover a high level of fixed expenses of “around 2 billion euros a week”, he informed ZDF.

Coronavirus has so far infected over 723,389 people and killed 33,997 worldwide.

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