Volkswagen’s truckmaking unit to cut 9,500 jobs
The company also plans to close three factories in a restructuring plan to improve earnings
Volkswagen’s truckmaking unit MAN plans to cut as much as a quarter of its workforce and potentially close three factories in a restructuring plan to improve earnings and finance investment in new vehicles.
Two factories in Germany and one in Austria are “up for discussion,” the Munich-based unit said in a statement on Friday. The restructuring, which could eliminate as many as 9,500 jobs, is expected to bolster the firm’s operating result by €1.8 billion ($2.1bn/Dh7.7bn).
The German automotive sector has been rocked by heavy job cuts as the coronavirus pandemic sapped demand for vehicles when manufacturers were already strapped with spending to develop cleaner vehicles. Carmakers including Mercedes-Benz maker Daimler and suppliers such as Schaeffler and Continental are planning to reduce thousands of positions.
MAN is part of Traton, Volkswagen’s listed truckmaking division, which was formed to compete with global rivals like Daimler and Volvo. Traton on Thursday boosted its bid for Navistar International, offering to buy the rest of the US manufacturer for $3.6bn.
Traton’s shares fell as much as 1.3 per cent in Frankfurt trading. Volkswagen’s shares were up 0.2 per cent.
Raising MAN’s profit margin is key to finance investments in technologies like electric trucks. The division, which generates the bulk of its sales in Europe, has lagged behind sister brand Scania in terms of profitability for years. Commercial vehicle sales in Europe were down 35 per cent in the first six months of the year, according to data from the European Automobile Manufacturers’ Association.
The aim of the restructuring is to raise MAN’s operating return on sales to 8 per cent by 2023, the company said. Some 55 per cent of its staff are located in Germany, with the remainder abroad.
Traton, which had its initial public offering last year, in July is in transition after the surprise departure of chief executive Andreas Renschler. He was replaced by Matthias Gruendler, the former chief financial officer of Munich-based truck unit.
Published: September 11, 2020 03:03 PM