Volkswagen AG Pref (XETR:VOW) warned China profits will plunge to $228M–$684M this year, as it navigates union and state resistance to cost cuts and legal limits, ends a Cariad–Bosch AV project, shifts to star-rated manager pay by 2027, and keeps selective use of aluminium wiring.
Previous Week Recap
- China Profit Forecast Slashed: Volkswagen AG Pref (VOW) expects China profit of $228M–$684M this year, down from about $5B previously, signaling a sharp cut to China-derived earnings guidance.
- Union Resistance To Cost Cuts: Volkswagen AG Pref (VOW) faces resistance to a cost-cutting plan from German unions and Lower Saxony; legal limits under Volkswagen Law cited. Company has discussed spin-offs as a workaround.
- Cariad, Bosch End Joint Project: Volkswagen AG Pref (VOW): VW’s software unit Cariad and Bosch ended their 2022 joint autonomous-driving project. Both keep access to IP and data; VW said investment was low three-digit million euros.
- Bonus System Replaced By Star Ratings: Volkswagen AG Pref (VOW) will scrap its bonus system in 2027 and adopt a star-rating manager evaluation tied to pay, affecting how managerial performance and compensation are measured.
- Copper Wiring Not Fully Replaced: Volkswagen AG Pref (VOW) says it has no plans to broadly replace copper wiring with aluminium, noting aluminium is used selectively where it offers specific advantages for wiring.
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