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(Bloomberg) –
Volkswagen AG’s truck production unit, MAN, plans to reduce its workforce by up to a quarter and potentially close 3 plants as a component of a restructuring plan to make a profit and finance investments in new vehicles.
Two factories in Germany and one in Austria are “under discussion,” the Munich-based unit said Friday. Restructuring, which could cut to 9,500 jobs, is expected to increase the company’s operating profit by 1. 8 billion euros. ($2. 1 billion).
The German automotive sector has been shaken by heavy task cuts as the coronavirus pandemic slows down and requires cars, as brands have already run out of spending to expand cleaner cars. Automakers, adding mercedes-Benz daimler automaker and suppliers such as Schaeffler AG and Continental AG, plan to cut thousands of tasks.
MAN is a component of Traton SE, Volkswagen’s publicly traded truck structure division, which was created to compete with global competition such as Daimler AG and Volvo AB. On Thursday, Traton strengthened its offer at Navistar International Corp. through the purchase of the rest of the U. S. manufacturer. $3. 6 billion.
Traton shares fell by 1. 3% in Frankfurt’s operations and Volkswagen’s shares rose 0. 2%.
Increasing MAN’s profit margin is essential to finance investments in technologies such as electric trucks. The division, which generates most of its sales in Europe, has been lagging for years in terms of profitability of the Sister Scania logo. Europe fell by 35% in the first six months of the year, according to the knowledge of the European Association of Automobile Manufacturers.
The purpose of the restructuring is to bring MAN’s sales back to 8% until 2023, the company said, about 55% of which are in Germany and the rest abroad.
Traton, who went public last year, is in transition after the wonderful departure of CEO Andreas Renschler in July, replaced by Matthias Gruendler, the former monetary leader of the Munich-based trucking unit.
(Context updates on task cuts, market reaction)
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