Over the weekend, reports surfaced that Volkswagen (VWAGY) has a plan to save EUR 4 billion. The worsening European automotive market matters to the U.S. markets, too. It is a leading indicator for the auto market. VW is struggling from the impact of weak demand, rising competition, and a failure to innovate.
VW is reportedly slashing pay levels by 10%. It will freeze pay hikes for next year and in 2026. In addition, it will consider closing several German plants.
Volkswagen’s troubles suggest that its peer, Stellantis (STLA), will continue to perform poorly. The firm lost its focus on the U.S. markets, hurting the brand value of Jeep, Dodge, and Chrysler.
On Monday evening, Ford Motor (F) posted smaller losses in its EV division. Loss per vehicle fell to $38,350. The bad news is twofold: disappointing guidance and higher costs. Warranty costs are easing but have not yet flowed to its bottom line. For FY 2024, EBIT will be $10 billion, below the previous guidance of $10 billion to $12 billion.
In the aerospace sector, Boeing (BA) announced the sale of 90 million shares. This, along with the sale of $5 billion depositary shares, will raise around $19 billion. The struggling firm needs the funds to cover its short-term financial needs. The firm also has debt maturing next year, so the cash raised will cover the amount due.
