PSA and FCA change the terms of the merger. The reason is coronavirus

Car manufacturers FCA and PSA continue to count on their merger. However, the coronavirus pandemic forced both partners to change the fusion conditions.

French carmaker PSA and Italian-American Fiat Chrysler (FCA) have modified the terms of their planned merger. The changes aim to maintain more cash and reduce costs more during the ongoing coronavirus crisis. The companies announced this in today’s statement. The merged company will be called Stellantis and is set to be the fourth largest carmaker in the world after Volkswagen, Toyota and Renault-Nissan.

The FCA will reduce the cash part of the special dividend of 5.5 billion euros, which is to be received by the company’s shareholders under the terms of the agreement signed last year, to 2.9 billion euros (CZK 77.3 billion). PSA will then delay the planned distribution of its 46 percent stake in component manufacturer Faurecia to shareholders in the new group. Faurecia’s market capitalization now stands at 5.9 billion euros.

An informed source told Reuters that the aim of these changes is to strengthen the balance sheet structure of both companies after the coronavirus crisis and to ensure that the planned merger is completed as soon as possible.

Analysts warn that paying such high cash to FCA shareholders, led by controlling investor EXOR, the holding company of the Italian Agnelli family, could weaken the new carmaker’s finances as the automotive industry pays a high price for this year’s coronavirus epidemic.

FCA and PSA now expect annual savings from their merger of more than five billion euros instead of the original more than 3.7 billion euros. Both carmakers have also confirmed that they expect the entire merger process to be completed in the first quarter of next year.

The companies agreed on a merger worth USD 50 billion (CZK 1.2 trillion) in December 2019. The agreement brings together the brands of the French group Peugeot, Citroën, Opel and DS with the brands Fiat, Chrysler, Jeep, Dodge, Maserati, Alfa Romeo and Ram . The combined sales of the merged group should reach approximately 8.7 million cars and sales of almost 170 billion euros.


Porsche will build a new plant in Slovakia, said Denník N. Production should start in seven years – ČT24 – Czech Television

According to the letter, the carmaker submitted the project to the authorities and applied for a building permit. The new plant is to be located in the Pováží region. Porsche plans to create 1,200 jobs in the plant and the investment is to amount to 250 million euros (6.5 billion crowns). Production is scheduled to begin in 2027.

Porsche currently has a tool shop in Dubnice nad Váhom, Slovakia, where almost 200 people work. Since last year, it has been building a new development center for car body lines near the village of Horná Streda, where 500 engineers are to find employment.

Slovakia is the world’s largest car manufacturer per capita. Last year, 1.1 million cars were produced here. In Slovakia, PSA, Jaguar Land Rover, Kia Motors and Volkswagen have car assembly plants.

Some experts point out that, like the Czechia, Slovakia is too dependent on the automotive industry. In case of its problems, the whole economy can feel it significantly. This year will probably be very difficult for this industry – not only due to the coronavirus crisis. For example, due to the European Union’s demands for emission reductions and a rapid transition to electromobility.


Prado overturned at the entrance to the miner. 12.06.2020. News SOCOM. Uglegorsk. Sakhalin.Info

16:03 12 June 2020

Edition of IA received photographs of an accident in Uglegorsky district. According to witnesses, the Toyota Land Cruiser Prado turned over and lay on the roof near the outskirts of Shakhtersk. What exactly was the cause of the accident is unknown, because the road to this place is almost perfect.

Also witnesses said that the driver is alive. About the injuries not reported. It is only known that it had been taken away from the scene.


Car sales in the EU plunge 55 percent

Volkswagen plant

The bands are currently at a standstill because of the corona crisis.

(Photo: dpa)

Hamburg The car market in the European Union has shrunk by more than half due to the corona crisis. In March, around 567,000 vehicles had 55 percent fewer new cars on the roads than a year ago, as the manufacturers’ association ACEA announced on Friday in Brussels. Since the beginning of the year, demand for cars across the EU has shrunk by a quarter to just under 2.5 million vehicles.

The reason was the restrictions on public life to curb the virus pandemic, which brought auto trading to a standstill. The carmakers also stopped the tapes in mid-March to protect employees from infection.

The biggest drop in sales was minus 85 percent in Italy, followed by minus 72 percent in France and Spain with minus 69 percent. In Germany, new registrations fell by almost 38 percent.

All brands listed in the ACEA statistics posted a drop in sales. Among the German manufacturers, the VWCorporation slumped 46.2 percent. At BMW it was down 40.7 percent on the previous month Daimler by 39.4 percent. The French manufacturers PSA and Renault By contrast, slumps of more than 60 percent were accepted.

More: Volkswagen cuts its forecast for the current year.


Death of Jacques Calvet, great figure of the French employers, savior of PSA

Jacques Calvet, died Thursday at 88 years old. At the head of PSA for fifteen years, he had become the symbol of French employers.

Jacques Calvet, great captain of industry, directed PSA from 1983 to 1997.
Jacques Calvet, great captain of industry, directed PSA from 1983 to 1997. STEPHANE DE SAKUTIN / AFP

With his tall stature, his slow speech as inspired by that of Valéry Giscard d’Estaing, whom he had accompanied for fifteen years as director of cabinet during his successive mandates in the Ministry of Finance, Jacques Calvet was one of the great characters of French economic life in the 80s and 90s.

It was at the head of the Peugeot group that Jacques Calvet became a captain of industry and the great figure of tricolor employers. A celebrity that even earned him

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The corona crisis is depressing the rating of the major auto companies.

Düsseldorf, Munich, Frankfurt VW has started Daimler and BMW followed shortly afterwards: Before Easter, the large German car companies had raised billions on the bond markets. There was great interest among investors. For all issues, investor demand far exceeded the volume offered by the groups.

But the successful new issues cannot hide the fact that it is becoming uncomfortable for automakers in the corona crisis. You still get fresh money – but at significantly higher costs. The average return on the Bank of America Euro Autogroup Index, the most important bond index in the European automotive industry, has recently skyrocketed to more than three percent. Daimler, BMW and ford have already been downgraded by the rating agencies.

Until recently, large auto corporation bonds were considered safe paper, only slightly more risky than government bonds. That changed with the corona crisis, says Paula Weißhuber, who at the Bank of America is responsible for the business with the issuance of corporate bonds in Europe: “The risk premiums are very high in historical comparison.”

Nevertheless, companies with good credit ratings would still have strong access to the bond market, says Weißhuber. “Many of the companies that have been active since the end of March did not necessarily have planned this at the current time,” she reports. “However, the companies have preferred financing plans to strengthen their liquidity as a precaution.” Reserves in case the crisis should drag on.

Above all, the liquidity buffers are kept in mind by the rating agencies, confirms Falk Frey, an expert for the automotive sector at Moody’s. “The car companies have certainly burned a significant part of their cash reserves while the fixed costs continue,” he says with regard to the closings of Volkswagen, Daimler and Co. The VW group alone incurs fixed costs of two billion euros each week. At least at times there is hardly any income.

Take Volkswagen, for example: 32 out of 33 Group plants are back in operation in China, but production in Europe and the USA has been in place since the end of March. After the shutdown in China, BMW sold over 20 percent fewer cars in the first quarter; in the second quarter, the standstill in Europe and the USA should once again cause a significant slump. For the German auto industry alone, the Institute for Customer Insight of the University of St. Gallen predicts an overcapacity of 25 percent in 2020 compared to the values ​​of 2018. With this utilization, the industry is writing high losses.

PSA and Nissan the “junk” rating threatens

However, Frey certifies that the major European manufacturers are in a good starting position. “Compared to the financial crisis in 2008 and 2009, they are better provided with liquidity,” he says. Therefore, Moody’s initially put most car companies “under observation” because of the corona crisis. In the nomenclature of rating agencies, this means an in-depth review of corporate ratings in the next three months. “It will be clear in the next few weeks whether there will be a recovery and whether car production will start up again soon,” emphasizes Frey.

However, should the crisis drag on for longer, the likelihood that more car manufacturers will be downgraded will also increase. The focus is particularly on those manufacturers who could risk losing their good credit rating, their so-called investment grade rating.


The VW group, which has the highest bond volume of the three major German automakers, is rated “A-” by the rating agencies. This puts the Wolfsburg-based company four steps further from the “junk” rating, in which many investors would part with VW bonds. However, a quick downgrade by three levels is highly unlikely. Daimler and BMW are also considered very solid.

The situation is different for foreign manufacturers: Opel parent PSA, like Nissan, is only one step away from the “junk” rating at Moody’s. Fiat Chrysler, Renault and Ford are already considered speculative stocks in the “junk” area. Analyst Frey warns: “Smaller or weaker automakers are likely to be more vulnerable. Some niche producers could collapse without additional help from shareholders or the government. ”

Losing an investment grade rating would hit automakers hard. Because many investors could then be forced to sell the securities. Many professional investors are only allowed to hold a limited number or no speculative bonds at all. A new sell-off would further increase yields and risk premiums – at a time when the situation is precarious anyway.

It will be expensive for Daimler

Daimler currently has the weakest balance sheet among the three major German car manufacturers. Flopped models, sluggish production starts and a lot of contaminated sites in the diesel scandal reduced the return on sales of the Mercedes manufacturer in 2019 to a meager 2.5 percent. Debt and provisions increased significantly, while equity and cash flow contracted significantly. After the outbreak of the corona crisis, the group’s financiers reacted immediately.

In early April, Daimler increased its liquidity buffer with a loan and a bond by a whopping 13.5 billion euros. On the one hand, this is a strong signal that, despite all the problems apart from short-time work, the group is not dependent on direct state aid. On the other hand, the transactions clearly show that it is becoming increasingly expensive for Daimler to back up debt. The five-year bond with a volume of EUR 1.5 billion, which the group recently issued, has an interest rate of 2.625 percent. For comparison: In November 2019, Daimler issued three bonds with interest rates between 0.25 and 1.125 percent.

At the end of March, the rating agency Standard & Poor’s downgraded Stuttgart from “A-” to “BBB +”. The outlook remains “negative”. The result: “Our current rating is still at risk”, states a Daimler manager with knowledge of numbers. Each downgrade can cost Daimler a lot of money. Finally, the group manages a portfolio of around € 162 billion in financial liabilities, more than half of which is in bonds and a quarter in loans.

Because the costs of refinancing are increasing, more savings must be made elsewhere. “We have to hit the brakes as much as possible on spending,” says one manager. Investments that were originally planned would now be “stretched, shortened or stopped” in many cases.

High refinancing needs at VW

Volkswagen has also felt the tougher conditions on the financial markets as a result of the corona crisis. Last week the VWFS leasing and finance division launched new bonds for a good two billion euros. Buyers receive 2.5 percent interest on VW paper with a term of three years. A similar bond from Volkswagen Financial Services was issued in the summer of last year. At that time, investors were still satisfied with a modest interest rate of 0.5 percent.

The Wolfsburg-based car company is preparing for tougher times in terms of its own refinancing in the coming months. At the moment, Volkswagen is still benefiting from the very decent financial year 2019 and a comprehensive inventory of liquid funds. At the beginning of the year, net liquidity of over 21 billion euros was on the books. That could be enough to survive difficult months.

However, not everything runs as smoothly as a few weeks ago. VW CFO Frank Witter wanted the European Central Bank (ECB) to buy short-running commercial paper not only from banks, but also from traditional industrial companies such as Volkswagen. The ECB has since announced that this is exactly what will happen in the future. “We expect this to have positive liquidity effects on the entire market,” says Wolfsburg.

While other car manufacturers such as Daimler have already secured additional credit lines, the Volkswagen Group can currently do without them. VW had agreed a credit line of more than 20 billion euros with important financial institutions much earlier. These lines of credit come from the time of the diesel affair, when Volkswagen last had to operate liquidity protection on a larger scale.

VW does not give a specific number of how high the refinancing needs are in the crisis year 2020. A spokesman said only that “the Volkswagen Group generally calculates with a refinancing requirement of 30 to 40 billion euros per year”. As can be seen from the latest consolidated balance sheet, the Wolfsburg-based automaker repaid bonds worth almost 20 billion euros last year alone.

An automotive supplier such as the Franconian Schaeffler Group is also currently trying to create a sufficient liquidity cushion. CEO Klaus Rosenfeld sees the supplier as being comparatively well equipped: “We will hold out for a long time if this is necessary.” The rolling bearing specialist has a good liquidity situation, more than two billion euros of unused credit lines and will not have to repay any loans in the next 24 months.

The good position of the francs is also due to happy timing. A year ago, Rosenfeld succeeded in placing investment-grade bonds on the capital market for the first time, thereby replacing shorter-dated bonds. The three newly placed tranches for 750, 800 and 650 million euros are due between 2022 and 2027, the interest coupon was between 1.125 and 2.875 percent. With the proceeds of EUR 2.2 billion, Schaeffler was able to repay three bonds with a volume of EUR 1.4 billion ahead of schedule.

More: Bosses from Daimler, BMW and VW made crisis calls to Merkel.


Dax is again targeting 10,000 points

Dusseldorf The leading German index starts with significant price gains into the new trading week and can briefly overcome the 10,000 meter mark. Listed in the afternoon trade the Dax 4.8 percent increase at 9980 points. The daily high is exactly 10,000 points, more than 450 points higher than on Friday.

The winners list is led by industrial stocks: The MTU-Shares rise after an interim plus of more than twelve Percent still seven percent, VW– Papers gain almost 9.5 percent, Daimler gain more than eight percent.

All 30 Dax values ​​are in the plus. Bank stocks are also among the winners. The European banking index rose 6.4 percent, led by the last shaken Natixis-Share from France with an increase in value of 14 percent.

Last Friday, the leading German index closed 0.5 percent lower at 9526 points. However, there were signs of easing after the index failed to respond to the miserable US job market data.

The stock exchanges in Asia closed clearly in positive territory, but is not traded in China due to public holidays. After the losses last Friday, the futures contracts for the New York stock exchanges showed strong gains: According to this, the stock market index should S&P 500 3.6 percent higher on Monday open.

The reason for the significant increase in the German stock market: Falling numbers in some European countries give rise to hope that the worst in the corona crisis could be over. They are in Germany alone New infections for the fourth day in a row declining. The Robert Koch Institute (RKI) reported another 3677 confirmed cases this Monday. The number rose to a total of 95,391. The increase was less than the 5936 new infections announced on Sunday.

But such numbers are already a thing Exit scenario in terms of quarantine measures conceivable? Chancellor Angela Merkel named the only benchmark for answering this question. In her video message from the previous weekend, she indicated that with a growth rate of seven percent per day (“doubling within ten days”) the restrictions could be relaxed.

“We should already be there,” says CommerzbankForeign exchange analyst Ulrich Leuchtmann. In his view, there is growing concern that there is no end in sight in this country. His calculation: With 6,000 new infections per day, it would take between 18 and 24 years in Germany until sufficient herd immunization was achieved. “Hopefully you made yourself comfortable in your home office,” is his humorous comment.

The upward movement on the Frankfurt Stock Exchange should therefore only be a relief rally for the time being be within the medium term downtrend. In order to achieve a real turnaround, a Covid-19 drug would probably have to be brought onto the market or at least an approximate end to the economic restrictions can be foreseen. Before that, the equity markets are unlikely to rise sustainably.

This view also confirms investor sentiment. After evaluating the current Handelsblatt survey Dax-Sentiment, Stephan Heibel advises: “If you have positions in your portfolio with which you would probably not get through another sell-off wave nervously, then you should part with it today.”

German industry is doing better than expected, even though new business declined before the corona crisis began. The companies collected 1.4 percent fewer orders in February than in the previous month, but economists had expected a decrease of 2.4 percent, after a strong order increase of 4.8 percent in January.

Given the global economic shock from the corona pandemic, however, is one Incoming orders slump in March and April as well as overall strong production losses in the first and second quarters.

Look at individual values

Commerzbank: The corona crisis gives the bank one large influx of private customers. The bank and her daughter have had since the beginning of the year Comdirect 130,000 new private customers won, mainly online, said private customer board member Michael Mandel. In the last week of March alone, 10,000 customers were added. “Obviously, a lot of people currently have time to deal with their banking business.” The share price rises by 7.1 percent.

Evotec: The biotech company is building a new mainstay in promising gene therapy business on. In the Austrian town of Orth an der Donau, a team of more than 20 scientists is to advance the research and development of gene therapy-based projects. It has already secured a first order: The Japanese pharmaceutical company Takeda has entered into a long-term research alliance Evotec a. The share rises by around three percent.

The stock is interesting because several hedge funds have bet on falling Evotec prices. As of last Friday, this so-called short sale rate was 7.3 percent, an unusually high figure.

Thyssen-Krupp: With a plus of more than twelve percent, the shares of the former industrial icon were among the big winners in the MDax small cap index. On the one hand, industrial papers were in demand as losers in the crash phase on Monday. The automotive supplier Hella and aircraft manufacturer Airbus also benefit from this. But at Thyssen-Krupp, too, hedge funds play a crucial role in their betting on falling prices to ensure that trading is volatile.

Betting on falling prices, known in the technical sense as short sales, works according to the following principle: Investors borrow shares from companies where they expect price losses. They sell these papers afterwards and hope that the prices will drop. Then you can buy the shares back later and give them back to the lender. The difference between the short sale and the subsequent buyback is then the profit.

Already at the end of March, Thyssen-Krupp papers peaked by almost 50 percent on two days with a high trading volume. As at the end of March, shares are likely to have bought back on Monday. The result will be available on Wednesday at the latest when the funds have to publish their short selling rates.

Rolls-Royce / PSA: Securing new credit lines with the British engine manufacturer ensured the individual values Rolls-Royce as well as the French car company PSA for buoyancy. Rolls-Royce stocks shot up up to 21.2 percent after the supplier left airbus and Boeing secured another £ 1.5 billion line of credit. However, the long-established company has lost more than half of its market value this year and is cutting its dividend for the first time in over 30 years.

Peugeot parent PSA also secured another three billion euros in loans to better position itself against the financial impact of the corona crisis. PSA shares rose as a result up to 12.4 percent.

Look at other asset classes

The gold price is rising again. A troy ounce now costs $ 1,630, an increase of 0.7 percent. At the beginning of March, the price was just under $ 1,500 because investors needed cash after the price slump in the stock markets.

The gold ETFs (exchange-traded index funds) recorded by the economic service Bloomberg recorded inflows of twelve tons on Friday. It was 47 tons in the entire week. The speculators, however, remain cautious.

Oil prices are falling again. A meeting scheduled for Monday of oil-producing countries that have merged into the so-called Opec plus has been postponed to Thursday.
In early Monday trading, a barrel (159 liters) of North Sea Brent cost $ 32.90 to ship in June, down 3.5 percent. The price of a barrel of American WTI with delivery in May dropped 2.7 percent to $ 27.50.

US President Donald Trump threatened tariffs on crude oil imports. “I’ll do whatever it takes,” Trump said at the White House on Saturday night. The background is the drastic drop in prices on the crude oil market. It goes back to a double crisis, consisting of a massive drop in demand due to the corona pandemic and the price war on the oil market. The US fracking industry in particular is suffering from the low prices.

Given the increasing optimism in the fight against the coronavirus pandemic, investors are withdrawing from government bonds that are considered a “safe haven”. In return, most yields on bonds in top-rated eurozone countries rose two to three basis points. Ten-year German government bonds yielded minus 0.4 percent three basis points firmer and thus significantly higher than the record low of minus 0.91 percent reached a month ago.

What the chart technique says

With the plus of the opening of trading on Monday, the downside risk for the leading German index will decrease. “Even if the picture brightens at short notice, it should be noted that all Dax values ​​are still below both the 200 and the 50-day average”, say Helaba’s technical analysts. With 23 titles, the 50 line also runs below the 200 day line. “In the past, such pronounced constellations only allowed limited scope on the top,” is their assessment.

According to the chart technique, the range from 10,138 up to and including 10,391 points is decisive. Among other things, there is the low of December 2018 with 10,279 points, the starting signal for the rally until mid-February 2020 with the previous record high. “This is the decisive hurdle in chart technology, the skipping of which would put the German standard values ​​on a quick recovery path,” say the technical analysts at Düsseldorfer Bank HSBC.

The small downward price gap from last Tuesday was closed, also a positive sign. Such downward price gaps arise when the daily low of the previous day is above the daily high of the subsequent trading day. The daily low on Tuesday was 9703 points, the following high of Wednesday was reached at 9686 points.

“When planning wealth, the rule is: never get out completely!”

Here is the page with the DAX course, here is the current tops & flops in the Dax. Current Short sales of investors can be found in our Short sales database.


Daimler closes its factories for another two weeks

Munich, Frankfurt The corona virus has done what has not happened in the wake of the financial crisis, the diesel scandal or a natural disaster: the work in the German automobile plants is almost completely idle. BMW, Daimler, VW, Opel or ford had kept the tapes going even after the collapse of the capital markets following the bankruptcy of the investment bank Lehman Brothers in 2008. The factories have been quiet since the beginning of this week.

And this calm should last longer than originally thought. In any case, Daimler extended the closing times for its European plants by another two weeks on Thursday. The world’s largest manufacturer of premium cars and trucks will now stop production by April 17th. “That became necessary because at the moment there is no demand,” said Daimler works council chief Michael Brecht to the Handelsblatt.

The Swabians are not alone in their decision. In parallel to Daimler, the confirmed on Thursday PSASubsidiary Opel to send thousands of employees on short-time work. The employees in the plants in Rüsselsheim, Kaiserslautern and Eisenach should “precautionarily” shorten their working hours for half a year.

“However, we very much hope to be able to end this earlier,” said a company spokesman. Volkswagen had previously announced that it would send around 80,000 employees on vacation in Germany.

In total, more than 200,000 employees in Germany’s largest industry have to adjust to lower wages. Even in the worst case, for example, Daimler employees would still receive 80 percent of their net wages during the short-time working phase. However, the burdens should not be passed on to the employees alone.

Debate about bonuses

“We now also need to have a quick discussion about a contribution from managers,” said Daimler works council member Brecht. Corresponding thoughts are also stirring at VW. The bonus payments for the executives of the multi-brand group add up to around one billion euros, according to circles in the company.

It is less likely that the dividend for the past year could be cut. “With this, we could protect the liquidity of our group,” said a board member of a large manufacturer who wanted to remain anonymous. However, the pressure on share prices would increase even further.

The slump on the stock markets is already causing wild speculation about a possible takeover of Daimler by the major Chinese shareholders BAIC and GeelyFounder Li Shufu. Financial experts consider such a takeover to be very unlikely. But Brecht emphasized: “Our stock market price is a bargain, so we will have to be vigilant.”

Daimler’s top employee representative also warns elsewhere: “There is life after Corona. We have to prepare for that. ”For example, Mercedes engineers are still tinkering with the completion of the new S-Class despite production being stopped. The flagship of the brand with the star should roll off the assembly line at the end of the year.

Brecht fears that the shutdown of German automobile production could continue beyond mid-April. “We will have to see how the overall situation and thus the demand develop.” No one can realistically answer the question of how long the work in the factories has to be idle today.

From his point of view, it is clear that production should start rather slowly after the abrupt stop. “We won’t be able to walk at full load,” said Brecht. Alone due to the stricter hygiene measures, the work on the conveyor would have to be rectified. He also expects bottlenecks at the suppliers. “It’s like after a full closure on the highway. If this is lifted, the traffic will only gradually roll in after the traffic jam. “

In Italy and Spain in particular, the two European countries that are particularly struggling to curb the pandemic, production has stood still for an indefinite period. Like VW and other manufacturers, Daimler relies on supplies from these two countries. The company ranks said that alternatives are currently being sought to compensate for the failures.

Hope for China

It is even more important for the automotive industry that demand picks up again quickly. Currently, Europeans and Americans have other concerns than worrying about buying a new car. The companies have not yet announced specific sales figures. However, when the factories in China had to close due to the corona virus in early February, demand had fallen by over 80 percent. It is unlikely to look any better in Europe and the USA.

In the meantime, China is seen by many in industry as a blueprint for further development. Daimler boss Ola Källenius, for example, now sees business in the Far East almost returning to normal after the severe slump. The Mercedes factories in Beijing should be able to produce at full capacity again in a few weeks, Källenius said in an interview in the Handelsblatt earlier this week: “Every day, more people come to the dealerships. Demand is picking up. ”

Handelsblatt Morning Briefing - Corona Spezial

But skepticism is appropriate. Andreas Radics, partner at Berylls Strategy Advisors, expects global car sales to shrink by about ten percent this year. However, it is still too early to precisely quantify the impact of the pandemic on the auto industry, the industry expert warns. “But I assume that we have only seen a fraction of the faults so far.

Not least because consumer behavior will change in the medium term, ”says Radics. “Only manufacturers who can quickly develop a new strategy for production, trade and model portfolio and thus react flexibly to the crisis will get away with a black eye.”

After all, Daimler used the time when the factories in China were already at a standstill to pre-produce its S-Class luxury model in Europe, according to corporate circles. These stocks would now be shipped to Asia to meet the increasing demand there.

The group builds its luxury limousine exclusively in its factory in Sindelfingen, which is now also being decommissioned. With the export of the S-Class, Daimler is now getting at least some money in the till. Securing liquidity is a top priority. “Cash is king,” said a board member.

More: Daimler works council chief Michael Brecht: “I expect bottlenecks at the suppliers”


BMW, Daimler, VW: Corona crisis stops European car production

Volkswagen, AudiSkoda Porsche, PSA, ford, Daimler, Rolls-Royce, Nissan, Toyota and BMW close their factories, BMW even until April 19. The rapid spread of the corona virus in Europe has done what no economic crisis in history has ever done. All the car manufacturers’ belts in Europe stand still. The absolute state of emergency has been reached.

The first closings of the car manufacturers, in particular the shutdown of VW’s production, started a chain reaction, which now also applies to suppliers like Bosch, Continental, ZF and many more hits with full hardness. Germany’s most important industry is paralyzed, hundreds of thousands of people who work for car manufacturers and suppliers have to go on short-time work.

The companies cannot yet estimate the damage that the virus pandemic will cause. But the Lippstadt MDax group Hella has already delivered a bitter foretaste: On Wednesday the company was forced to issue a profit warning. Hella expects that the sales due to the pandemic will be below the originally forecast range of 6.5 to 7 billion euros.

Hella cannot say how much the revenues will decrease. “As there is currently only limited visibility regarding the consequences of the pandemic, it is currently not possible to quantify the amount more precisely,” the group said in an ad hoc announcement. The supplier also makes no precise statements regarding the profit.

Just so much: The adjusted EBIT margin will “fall significantly short of” the forecast target of 6.5 to 7.5 percent.

Short-time work and savings programs

But that’s just the beginning: Hella employees have to expect major cuts. In addition to the existing austerity program, the company had “decided on a comprehensive package of measures to further reduce personnel and material costs,” the ad hoc announcement continued. Because of the corona pandemic, the management is currently considering the temporary closure of production facilities. Short-time work at domestic locations is in preparation.

Bosch and ZF also pulled the ripcord. The world’s largest automotive supplier Bosch is shutting down production or temporarily suspending it because of the corona pandemic in individual plants in France, Italy and Spain, as a spokeswoman explained.

The situation is assessed with customers and employee representatives. “We can currently largely maintain production and our supply chains and meet customers’ needs,” she added.

At the engine parts specialist Mahle, one thing is certain: “The situation will lead to short-time work,” said a spokesman. It is not yet clear which locations it will hit.

As a result of its customers in the automotive industry, ZF Friedrichshafen also expects production stops in individual plants. “We assume that we will have both individual product lines and entire plants paused in order to follow the cut in demand from automakers,” said a spokesman.

The plant managers of the ZF factories in Europe would discuss this, including possible short-time work. So far, however, the supply chains at the manufacturer of gearboxes and electric drives could have been maintained.

Continental only announced in the evening that plants would be closed. Production will be adjusted worldwide and temporarily partially reduced to zero, said the DaxGroup with.

Kirchhoff cuts production

The group does not disclose which plants are affected and how high the damage is. It was already known from the environment of the Conti drive division Vitesco Technologies that only existing orders are being processed.

Kirchhoff is also reducing production in its plants at most locations worldwide. “Of course, our customers’ incoming orders are currently declining sharply, but there is also the fact that car dealers across Europe are being affected by the shutdown,” said J. Wolfgang Kirchhoff, CEO of Kirchhoff Automotive. “So currently no vehicles can be delivered to customers,” he added.

It is currently being examined which areas in the various plants are to be shut down. In the factory at the company’s headquarters in Iserlohn, certain production areas remained in operation.

Vehicle parts for the USA and China would be produced there. Because the plants in China would just start up their production again. “We expect sales in all three major markets around the world to decline this year. However, this will be out of phase. China is ramping up again, Europe is currently ramping down, and North America will follow suit, ”Kirchhoff continued. From April 1, a large part of the approximately 1,300 employees of the two plants in Iserlohn and Attendorn will go on short-time work temporarily.


Crash on the stock market continues – Dax loses

Dax curve

View of the Dax curve in the Frankfurt trading hall.

(Photo: dpa)

Dusseldorf The German stock market simply has no hold. In midday trading, the leading index is 5.2 percent in the red and stands at 8474 points. The biggest losers include stocks from the aviation industry.

A skeptical analyst comment on the titles of airbus and MTU Aero Engines further down. Airbus titles fell on Wednesday by more than fifteen percent to 53.28 euros, the lowest since November 2016. MTU shares plummeted in Frankfurt by up to 17.9 percent to their lowest level in more than three years.

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