The German carmakers owe their profits to the Corona crisis

According to experts, the German carmakers owe their recently reported billion-dollar profits to the cost-cutting measures imposed on staff during the Corona crisis. In the previous year, most companies reacted to the temporary slump in demand in the auto sector with downsizing or strict hiring freezes, says industry expert Stefan Reindl. "Almost all corporations implemented savings models back then, which also took effect relatively quickly," says Reindl, who heads the Institute for the Automotive Industry in Geislingen. The effectiveness of these measures can now be seen in a phase in which the market is clearly picking up again: Although the industry is currently struggling with a semiconductor shortage, the profits of VW and Daimler, for example, have been surprisingly high. Volkswagen had recently reported a lush operating profit of around 11 billion euros for the first half of the year, Daimler had exceeded market expectations with an operating surplus of 5.2 billion euros in the second quarter between April and June alone. Net earnings data are still to be released. Reindl said that the carmakers had used the Corona crisis in a targeted manner to carry out conversions that were already planned in view of the transformation from internal combustion engines to electromobility faster than originally planned. That was possible "faster and more dynamically" in the crisis than under normal conditions. "The measures that were taken at the beginning of the pandemic were anything but indiscriminate, but rather sustainable," says Reindl. At Daimler, CEO Ola Källenius had pushed ahead and expanded an already planned austerity program in the previous year, according to reports, up to 20,000 jobs should disappear in this way - Daimler does not give an exact number. At BMW, the reduction of 6,000 jobs was confirmed, VW had announced a strict freeze on new hires during the crisis. Trade unions and works councils had accepted all of this, also under the impression of the crisis, the then ongoing short-time work and sometimes deep red numbers.