Volkswagen told workers in China that they need to work overtime to recover production losses from a wave of Covid illness.
According to Reuters, workers at a Chengdu factory that VW owns in a joint venture with China’s FAW Group were told to work 11-hour days in order to meet demand.
These extra hours were added to the eight-hour workday and came after the factory was forced to close for two weeks in November due to a shortage of parts caused by Covid illness at a supplier.
Volkswagen is trying to revive its fortunes in China, where it earns half its profits.
China’s sudden policy shift from strict lockdowns and substantial relaxation of rules has caused havoc in manufacturing. Without the right workers, production lines can stop and become immobile. The sudden relaxation of restrictions has also led to an increase in illness and absenteeism.
The construction of car production lines is expensive and can be stopped at any time.
Volkswagen had to temporarily close some factories in China during the lockdowns. However, it also tried to keep others open by using a closed-loop system. Workers lived on-site to minimize contact with outsiders.
Hospitals and crematoriums are having a hard time keeping up with the rapid spread of the virus.
Volkswagen’s China sales dropped 14% to 3.3 million cars last year, partially due to the lack of electric vehicles being adopted. BYD, a local competitor to Volkswagen, has been fiercely competing with the German company. It sold 152,863 vehicles in the first four weeks last month, compared to VW’s 143,602.
Volkswagen declined to comment.
China’s car sales fell by 9.5% in November, its first drop in six months.
Arno Antlitz is the chief financial officer at Volkswagen. He stated that he believes next year will be “even more difficult” than 2022 because of inflation and a deteriorating economic outlook.
The company intends to export electric cars from China to Europe due to limited production capacity in its home market.
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