The Volkswagen production halt amid coronavirus fears is costing automotive giant around $2.2 billion a week on fixed expenditure, Automotive News Europe reported. VW’s announcement to cease operations across Europe came last week, in an attempt to address rising concerns of the coronavirus pandemic.
Following in the footsteps of automakers such as Toyota, Ford, Nissan, and FCA, VW plans to resume production and operations wherever possible. The company would need to take the prescribed measures if workers return, such as sterilizing the working space and ensuring safe distances. CEO Herbert Diess stated in Markus Lanz talk show that they have started operations in China, but the work is slow.
VW has hinted toward job cuts without going into specifics due to the prevailing economic uncertainty. The company can endure production shutdowns in America and Europe “for several weeks, maybe months, but not indefinitely”, Mr. Diess stated.
Selling commercial paper is an option VW is considering to meet its commitments, while it has yet to use several bank credit lines worth more than 20 billion euros.
The automakers sitting idle have decided to end production halt sometime in April. Among them, Ford is resuming its Mexican plant on April 6, and North American facilities on April 14, the date on which FCA will also restart production. Toyota has also decided to start work in North America from April 20.
Meanwhile, some automakers are utilizing their facilities to produce the required medical supplies, including face masks and face shields for health workers.