Volkswagen Burning Through 2 Billion Euros a Week Amid the Coronavirus Crisis

Herbert Diess, CEO of Volkswagen AG (ETR: VOW), has said that the German car giant is burning through 2 billion euros a week amid the halted production. Without an intervention, Volkswagen may cut jobs, warns Diess.

The car giant is looking at ways to restart production and not endanger its staff, Diess said, before adding that Volkswagen is not selling anywhere in the world, except for China, where demand is starting to pick up.

Volkswagen’s Chief Financial Officer Frank Witter has urged the ECB to accelerate purchases of short-term debt. It is still unclear whether ECB plans to purchase commercial papers, which would obviously benefit Volkswagen, as one of Europe’s most regular corporate issuers of commercial paper.

Volkswagen prefers the issuance of commercial paper to credits. The Wolfsburg-based car giant has access to more than 20 billion euros in credit lines.

On the other hand, VW has the capacity to issue 20 billion euros in commercial paper. According to Witter, Volkswagen doesn’t plan to ask the German government for help.

Volkswagen employs more than 670,000 people globally in 124 factories, out of which half are in Europe. It is the world’s biggest carmaker by sales as it owns brands such as Audi, Bentley, Bugatti, Lamborghini, Porsche, Seat and Skoda.