Long, Rocky Road Ahead for Automakers: Diess

Steph Willems
by Steph Willems
long rocky road ahead for automakers diess

Volkswagen CEO Herbert Diess knows the viral headwinds facing his company won’t ease in a few weeks, nor will the need to curtail production in the face of rampant coronavirus infections.

Following a week that saw the auto giant idle production in Europe and the United States, Diess said the temporary plant shutdowns are just the beginning. His words no doubt echo the thoughts of most, if not all, Western auto execs.

In a LinkedIn post noticed by Reuters, Diess said, “Most of our factories are closing for two weeks, in some regions for three. It is likely that these measures will last.”

While not in the same boat as hard-hit nations like Italy and Spain, Germany, likes its neighbor, France, face growing numbers of coronavirus infections. The country’s case load is expected to top 20,000 on Monday as new measures aimed at flattening the rise in infections go into effect. German Chancellor Angela Merkel recently banned public gatherings of more than two people. Businesses of almost all types are shuttered.

“Volkswagen will support these measures as much as possible in order to save as many people as possible,” Diess wrote. “That is our first priority.”

In the U.S., Chattanooga Assembly went dark on Saturday for a period of one week; following a deep-cleaning, plant execs will make a judgement call. It’s not expected that the viral environment in the U.S. will get any better for a number of weeks, and the same goes for Europe.

The spread of the virus is unlikely to have stopped in several weeks,” Diess wrote, stating the obvious. “So we have to be prepared to live with the threat for a long time — until effective medication or vaccination becomes available. Until then. preventing the transmission and slowing down the spread are the main measures.”

True everywhere, but where does that leave VW and its rivals? Well, for starters, VW is leveraging its manufacturing capacity and supply chain to provide Germany with respiratory masks and other essential health items; we’ve seen General Motors and Fiat Chrysler make moves towards this on the other side of the Atlantic. At the same time, however, the business of building cars continues in whatever form the current situation will allow.

Like Ford, the German giant aims to firm up its financial footing, but there’s still many other areas in which to act, Diess said.

“Cutting edge measures to secure liquidity, but also the ability to deliver, for spare parts or the continuation of critical vehicle projects, such as the ID.3 startup, the supply of battery cells, or the work of our crisis teams, and much more — are extremely important to deal with the Crisis,” Diess said.

That capital “c” is no typo.

[Image: Volkswagen]

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6 of 27 comments
  • Matt51 Matt51 on Mar 23, 2020

    GM has been big on stock buybacks, so let them eat cake.

    • See 3 previous
    • DenverMike DenverMike on Mar 24, 2020

      @Matt51 For the normal economic recession, of course. If GM disappeared, Ford and FCA would've came out of it much stronger, soaking up most workers and suppliers. That sort of thing happens everyday in small business. This isn't anything like that.

  • Inside Looking Out Inside Looking Out on Mar 23, 2020

    So conclusion is VW Dies? I mean Diess. How about others?

  • Vatchy If you want to talk about global warming, you might start here: https://en.wikipedia.org/wiki/Darvaza_gas_crater
  • 28-Cars-Later $55,218 for a new GR Corolla: https://www.reddit.com/r/COROLLA/comments/zcw10i/toyota_needs_to_know_the_demand_is_there_but_this/"But if OTD prices get beyond 50k there are better options"That's what people were arguing in that thread.
  • Lou_BC "The Oldsmobile Diesel engine is a series of  V6 and  V8  diesel engines produced by  General Motors from 1978 to 1985. The 350 cu in (5.7 L) V8 was introduced in 1978, followed by a 261 cu in (4.3 L) V8 only for the 1979 model year. In 1982, a 263 cu in (4.3 L) V6 became available for both front and  rear-wheel drive vehicles. Sales peaked in 1981 at approximately 310,000 units, which represented 60% of the total U.S. passenger vehicle diesel market. However, this success was short-lived as the V8 diesel engine suffered severe reliability issues, and the engines were discontinued after the 1985 model year."I'd say one would be best off finding a gasser to plunk in there or take a loss and re-sell it.
  • ToolGuy GM Buying Guide:• Body on frame• V8 engine• Gasoline engine• Longitudinally-mounted engine• Normally-aspirated engine• Rear wheel drive (or 4WD)That's 6 items. Aim for 4 out of 6 or higher. (My two GM vehicles score a 6 and a 3.) This vehicle is a 1.
  • 28-Cars-Later Based on what people were posting, its going to debut with enough ADM to buy a CPO Porsche so why bother (Unless HMC can bring the hammer down somehow)?