Volkswagen is growing concerned that its existing austerity measures for the sports car manufacturer, Porsche, may not be adequate, particularly following a profit warning. Documents related to the supervisory board resolution at VW from the beginning of this month reveal gaps that the company in Wolfsburg sees. For the “Sport Luxury” brand group, to which Porsche belongs, the proposed plan calls for a reduction of approximately 4,100 employees. Furthermore, around 700 million euros were missing from the general operating costs. Crucially, the VW plan stipulates that these reductions apply “in addition to existing agreements.” This means the 4,100 positions would be added on top of work reductions already agreed upon. However, because of Porsche’s operational independence, VW can only recommend the measures, not mandate them.
This growing scrutiny comes after the Wolfsburg automotive conglomerate cut its earnings forecast for the current year late last Friday afternoon. A major reason for this required disclosure was an impairment adjustment at Porsche. Even the family holding, Porsche SE, had to lower its own forecast. Consequently, shares in Volkswagen, Porsche AG, and Porsche SE came under significant pressure.
A Porsche spokesperson declined to comment on the situation, and the works council was unreachable. In late July, Porsche had already agreed with its employees to reduce an additional 5,000 positions, on top of roughly 4,000 roles shed in an initial cost-saving package.
