VW’s MAN Truckmaker to Cut As Many As 9,500 Jobs
Volkswagen AG’s truckmaking unit MAN plans to cut as much as a quarter of its workforce and potentially close three factories in a restructuring plan to improve earnings and finance investment in new vehicles.
Two factories in Germany and one in Austria are “up for discussion,” the Munich-based unit said in a statement on Friday. The restructuring, which could eliminate as many as 9,500 jobs, is expected to bolster the firm’s operating result by 1.8 billion euros ($2.1 billion).
The German automotive sector has been rocked by heavy job cuts as the coronavirus pandemic sapped demand for vehicles when manufacturers were already strapped with spending to develop cleaner vehicles. Carmakers including Mercedes-Benz maker Daimler and suppliers such as Schaeffler AG and Continental AG are planning to reduce thousands of positions.
MAN is part of Traton SE, Volkswagen’s listed truckmaking division, which was formed to compete with global rivals like Daimler AG and Volvo AB. Traton on Thursday boosted its bid for Navistar International Corp., offering to buy the rest of the U.S. manufacturer for $3.6 billion.
Traton’s shares fell as much as 1.3% in Frankfurt trading. Volkswagen’s shares were up 0.2%.
Raising MAN’s profit margin is key to finance investments in technologies like electric trucks. The division, which generates the bulk of its sales in Europe, has lagged behind sister brand Scania in terms of profitability for years. Commercial vehicle sales in Europe were down 35% in the first six months of the year, according to data from the European Automobile Manufacturers’ Association.
The aim of the restructuring is to raise MAN’s operating return on sales to 8% by 2023, the company said. Some 55% of its staff are located in Germany, with the remainder abroad.
Traton, which had its initial public offering last year, is in transition after the surprise departure of Chief Executive Officer Andreas Renschler in July. He was replaced by Matthias Gruendler, the former chief financial officer of Munich-based truck unit.
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