VOLKSWAGEN AG 
The VW subsidiary Audi has initiated an "information and consultation process" for the plant in order to find a solution for the site with around 3,000 employees. "This may also include the closure of the plant if no alternative can be found," Audi announced on Tuesday. Should the production facility be closed, it would be the first time in decades that Volkswagen has closed a plant.
The Group is now bracing itself for additional costs in the billions. At 6.5 to seven percent, the operating return on sales will be half a percentage point lower than previously forecast, Volkswagen announced. One reason for the additional charges of up to 2.6 billion euros is the expenses in connection with the plant in Brussels, which will be deferred in the third quarter, it said. In addition, there would also be further costs for the planned closure of the MAN gas turbine plant and exchange rate losses in connection with the withdrawal from the Russian business. Provisions amounting to 0.9 billion euros for job cuts in administration were already recognized in the second quarter. The company will provide details when it presents its quarterly figures on August 1.
Q8 E-TRON MAY BE DISCONTINUED PREMATURELY
Audi is struggling with the weak sales of the electric Q8, which is only built in Brussels and could now be discontinued prematurely. According to company sources, the vehicle could be discontinued in the course of next year. The Q8 e-tron has been on the market since 2018 and is Audi's oldest electric vehicle. It is now facing competition from vehicles on the new premium platform, such as the Q6 e-tron, which is now on the market after years of delay.
Audi has left open how long it will take for a decision to be made on the plant in Brussels. The first talks about the future of the site have already been held and further negotiations will follow. "The announcement of the intention is not yet a final decision," said plant manager Volker Germann. Nevertheless, the news is very moving for the workforce. "It is important to have a transparent and constructive dialog in the process that now follows." A company cannot simply close a plant in Belgium, but must first negotiate possible alternatives according to the current legal situation. This process, also known as the "Renault process", was introduced at the end of the 1990s after the unexpected closure of a Renault plant led to turbulence.
Works council circles said that the difficult situation in Brussels had long been an issue beyond Audi. At the meeting of the VW global group works council, the works councils handed over a declaration of solidarity to the Board of Management. Rita Beck, spokesperson for the Audi Committee in the European VW Group Works Council, explained on Tuesday that the employee representatives were calling for a sustainable future for the plant and its workforce. "We hope that a viable and sustainable solution will be worked out in the course of the decision, in the consultation process that has now been initiated."
The plant in Brussels has long been a problem child for the Group. The production costs there are higher than at other locations, partly due to its location in the urban area of the Belgian capital. It is bordered on one side by railroad tracks and on the other by a residential area. There is no press shop, so the parts have to be delivered in. Logistics are also considered difficult.
(Report by Christina Amann. Edited by Olaf Brenner. If you have any questions, please contact our editorial team at Berlin.Newsroom@thomsonreuters.com (for politics and the economy) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)
