The coronavirus economic meltdown continues.
The novel coronavirus continues to wreak havoc on the global economy and Volkswagen is apparently its latest victim. According to VW, the German automaker will temporarily shut down production "at the vast majority of its plants" starting this Friday. For now, the report does not specifically mention which VW production facilities will close its doors but given this is a global pandemic situation, it's fair to assume this will apply to factories across the planet.
What's for certain is that VW plants in Spain, Portugal, Slovakia, and Italy will close "before the end of this week." German and other European plants will follow "in the coming weeks." VW stresses this decision is being carried out in consideration of the health and welfare of its factory employees whose "work is carried out shoulder to shoulder… on the assembly lines."
White-collar office workers have already been instructed to work from home, as is the situation with most automakers and companies in general. But up until now, there's been no firm decision on what will happen with the actual production plants. Well, that decision has just been made. For now, American automakers such as Ford and GM are keeping their factories up and running, but there's a very high likelihood that will soon change.
VW Group's decision to shut down plant operations comes at a time when its main VW brand reported profits for 2019. This shutdown will undoubtedly cause great harm for the rest of the year.
"The corona pandemic presents us with unknown operational and financial challenges," said Herbert Diess, CEO of Volkswagen Group. "We will succeed in overcoming the corona crisis by pooling our strengths and with close cooperation and high morale in our Group." However, VW production in China has resumed following plant closures as the virus appears to be under control there.