Volkswagen Faces Tough Choices Amidst Efficiency Challenges

Volkswagen's Chief Financial Officer, Arno Antlitz, announced that the company's German factories need to boost efficiency to maintain employment levels. At a Goldman Sachs conference, he discussed potential plant closures and dividend reductions due to declining earnings, urging stakeholders to contribute to cost-saving efforts.

At a recent Goldman Sachs conference in London, Volkswagen's finance chief, Arno Antlitz, warned that inefficiencies at the automaker's German plants might lead to workforce reductions if not addressed. Antlitz highlighted the necessity of fully utilizing plant capacity and hinted at possible plant closures if efficiency does not improve.

He further informed that Volkswagen's dividends would align with its reduced earnings, expecting a drop from 9 euros to 6.75 euros per share. The company aims for a payout ratio of at least 30% of post-tax earnings, which remains in line with analysts' forecasts amid union pressure for cost cuts.

Antlitz emphasized that the current dividend estimates exclude restructuring costs, which could impact future payouts. With significant stakes held by the Porsche and Piech families, maintaining dividends is critical, though Volkswagen's shares showed slight improvement after the CFO's remarks.

(With inputs from agencies.)