If the German factories of the Volkswagen (VW) car concern do not become more efficient, their workforce will have to be reduced. And the group’s dividends will decrease in line with the decrease in profit. This was stated by the company’s financial director Arno Antlitz in his speech at the Goldman Sachs conference in London. TASR informs about it based on a Reuters report.
“Our German factories are not competitive today. Without improving their efficiency and performance, we cannot maintain the current level of employment,” Antlitz said.
Closing plants in Germany
“The capacity of the plant must be fully utilized. In a shrinking market, this inevitably leads to discussions about closing some plants in Germany,” he added.
Volkswagen, Europe’s largest car manufacturer, is in a deep crisis. The management therefore plans to close some operations in Germany, for the first time in the company’s 87-year history. It needs to drastically cut Germany’s high labor costs and boost profits to defend market share in the face of low-cost competition from China and falling demand for cars.
Union officials have repeatedly called on Volkswagen executives and shareholders, including the Porsche and Piech families, who own a third of the group, to contribute to cost savings by accepting a reduced dividend.
In his speech in London, Antlitz reminded that the dividend will decrease along with the profit.
Decrease in profit
For the first nine months of the financial year 2024, Volkswagen’s profit fell by a third, which, according to LSEG estimates, should mean a dividend of 6.75 euros, compared to 9 euros per share last year.
Antlitz said the automaker has committed to pay out at least 30% of after-tax profits in the case of dividends. “It goes without saying that as a member of the executive board I am fully committed to doing my part to reduce costs,” Antlitz added, without giving further details.
The dividend payout of 30% is in line with experts’ forecasts. But that doesn’t include any provisions or costs for the ongoing restructuring process, which analysts say will reduce profits and, accordingly, the dividend payout.
5 billion euros as a minimum
Analysts believe Volkswagen will continue to be under pressure to cut its payout ratio, although they say a 5 billion euro payout may be a minimum for Porsche SE, which is controlled by the Porsche and Piech families.
The dividend from Volkswagen is one of Porsche SE’s most important sources of cash.
