Coronavirus Causes Volkswagen to Shut Down Operations, Potentially Affecting Other Automobile Brands
In the face of the rapidly spreading COVID-19, several major German automotive companies have been forced to adjust their production schedules. Confirmed cases of COVID-19 infections have been reported at several German plants, including Volkswagen's facilities. As a result, Volkswagen has decided to halt production at most of its locations, including its plant in Zwickau, which is ramping up production of the ID model. The exact impact of this measure on Volkswagen's production remains unclear.
The Robert Koch Institute (RKI) had recommended minimum distances to prevent the spread of the virus, which were difficult to maintain in production, leading to the temporary closure of Volkswagen plants. It is still uncertain how long these plants will remain closed.
Audi, another prominent German automaker, has announced a gradual production stop at its two sites in Germany, extending until the end of the week. The COVID-19 also has consequences for Audi, but the details are not provided in the available information. The chairman of Audi's works council, Jörg Schlagbauer, emphasizes the importance of securing the local sites' workload and jobs amid broader industry adjustments. Audi remains committed to its German sites, with planned investments of around eight billion euros by 2029 to keep Neckarsulm and Ingolstadt competitive and future-proof.
The PSA group, which includes Opel, has announced the closure of its European plants until at least March 27. Renault is also stopping production in France, affecting 12 plants with 18,000 employees.
The RKI has intensified its assessment of the risk posed by the COVID-19 due to the great dynamics of the pandemic and the strong increase in case numbers. The institute has reassessed the risk posed by the coronavirus, classifying it as 'high' for the population. However, the risk varies depending on the region, with some regions, such as Heinsberg in North Rhine-Westphalia, experiencing a 'very high' risk.
The works council at Volkswagen criticizes the late decision to close the plants and demands more clarity and responsibility from the VW board regarding the planned closures. The affected persons are recovering and are in home quarantine.
The COVID-19 is causing significant impacts on the European automotive industry, and it is essential for management to present detailed plans for the individual plants to ensure a smooth transition and minimize disruptions.
