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Recently updated on September 22, 2022 at 09:59 am
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There is one certainty in gambling - one thing that is not left to chance: the house always comes out victorious in the end, whether it's offering customers free spins no deposit or some other bonus. Like any other business, it has a business model that aims to ensure its profitability. Apparently that's different for car manufacturers.
10.000 part-time workers
Audi is forced to cut back production due to the global shortage of semiconductors and send 10.000 workers part-time, reports the German Handelsblatt. According to the report, the decision affects workers at the company's main production facilities in Ingolstadt and Neckarsulm. The change in Ingolstadt affects two production lines for the sedans A3, A4 and A5 and should come into effect by the end of May. In Neckarsulm, the assembly lines for several models will be stopped in the coming week; the car manufacturer has not yet made a decision for June. The ongoing shortage had already led to shift cuts and part-time work in the past few months. The total number of jobs to be shed worldwide is in the “low five-digit range” and includes the shedding of ten percent of management positions. A collective agreement that excludes compulsory redundancies until 2029 remains in force.
The world's leading manufacturer of luxury and commercial vehicles paved the way for the cuts earlier this month when new CEO Ola Kallenius warned that yields could remain low for the next two years. The 2020 target of achieving an operating return on sales of at least 4% for the most important Mercedes division disappointed investors and was less than half of what the French PSA Group generated in the mass market in the first half of this year. The cuts - equivalent to at least 3,3 percent of the workforce - will be implemented by the end of 2022 as part of an effort to reduce staff expenses by 1,4 billion euros. The company plans to expand early retirement programs and offer outsourcing to reduce administrative staff in Germany.
Reduced working hours
Automakers have announced plans for record investments in the development of new technology to meet stricter emissions regulations in key markets. At the same time, global demand for new vehicles is weakening after a decade of almost uninterrupted growth fueled by China. Both Audi and BMW announced plans for cuts this week after talks with the unions. Audi wants to cut up to 9.500 jobs in Germany, around 15 percent of the workforce, in order to improve the result by 6 billion euros. BMW has agreed on a collective agreement which, among other things, provides for lower bonus payments for employees in Germany.
Daimler will offer to reduce the weekly working hours and to let the contracts of most temporary workers in the administration expire. Daimler's existing collective bargaining agreement, which includes a planned wage increase next year, will remain unaffected by the cuts, said the carmaker's works council in a separate statement. Audi isn't the only automaker struggling to meet production targets amid global chip shortages, which has hit automakers hard after canceling many orders as plants stalled during the pandemic.
Microchip shortages have caused problems for automakers from Jaguar Land Rover to the Volkswagen Group. The company announced that it will suspend vehicle production at its Chattanooga plant for two weeks starting June 7, as semiconductors are becoming scarce worldwide. The chip shortage is also forcing automakers to leave out some high-end features like pre-installed navigation systems in order to keep production going. Earlier this week, German Chancellor Angela Merkel expressed concerns about the EU's lack of expertise in the manufacture of components such as chips and batteries, which are essential for the production of vehicles, among other things. In South Korea, Samsung Electronics, Hyundai Motor, the government and industry associations recently agreed to work together to respond to the scarcity of car chips. European Industry Commissioner Thierry Breton said in an interview with Bloomberg earlier this month that Europe would have to move away from its “too naive, too open” approach to design and manufacturing if it is to double chip production in the region by 2030.
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