Volkswagen Australia supply unaffected by strikes

VW Australia isn’t worried about any potential supply ramifications stemming from the ongoing factory strikes in Germany as the brand ponders unprecedented wage reductions, lay-offs and factory closures.

Speaking to carsales at the local ID.Buzz launch in Newcastle this week, Volkswagen Group Australia general manager Karsten Seifert said there was no impact on Volkswagens being shipped to Australia.

“At the moment, it does not affect us. It is a strike, what affect might it have? It might affect every possible country, but, at the moment, I don’t see that,” he said.

Seifert pointed to a likely positive outcome to negotiations between Volkswagen AG and the worker’s union, IG Metall, by early New Year.

“Still, at the moment, there are two parties, in a different way, negotiating the future,” he said.

“We still have some hope, probably in January, that they will find some solutions.”

Deutsche Welle reported this week that, following a series of rolling strikes beginning early this month, a fourth round of negotiations between Volkswagen and unions had begun on Monday without an agreement being reached.

As part of the ongoing rolling strikes, about 68,000 workers in nine German factories stopped work for four hours on Monday.

Volkswagen AG announcements this year have warned of the need for cost reduction over significant profit easing due to a decline in sales in key markets and rising fixed costs.

In the most recent quarterly report released in October, Volkswagen brands belonging to Brand Group Core (VW passenger and commercial, SEAT/Cupra and Skoda) had a net cash flow down 19 per cent YTD to November, despite similar sales as the previous period.

A statement summarising the report said that “despite stable vehicle sales … we were not able to offset higher fixed costs in the third quarter, especially at the VW brand.

“Moreover, the market headwinds have become even stronger in recent months. That is why we need more far-reaching measures to finance necessary investments and thus safeguard the future of Volkswagen for the long term.”

Volkswagen’s CEO Thomas Schäfer, already warned of the impending cost-cutting in August.

He said: “Despite all the cost-cutting measures already underway we need to reduce our fixed costs still further in order to stay firmly on course in this difficult market environment.”

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