disrupted production
Audi boss: “The work of our suppliers in the Ukraine moves us to tears”
03/18/2022, 6:24 p.m
Corona, lack of chips and now war in Ukraine: The automotive industry has been confronted with many crises for two years. Audi CEO Markus Duesmann is already talking about another “exceptional year” – but he is also cautiously optimistic.
Audi boss Markus Duesmann is very impressed by his supplier companies in Ukraine these days: “We have many very good suppliers in Ukraine, whose production is of course disrupted because many people had to flee,” he said in the podcast “The Zero Hour”. “I’m almost moved to tears when I see that the few people who are still on site are trying to keep up production. They even drive night shifts within walking distance to a bunker to be able to continue producing. For a living to be able to continue living in order to continue to have income.” He was impressed by the courage and will of the Ukrainians.
Markus Duesman
(Photo: picture alliance / SvenSimon)
Russia’s war against Ukraine also hit German car manufacturers because components from Ukraine are missing. As a result, there were production stops, and business with Russia is currently on hold. For Duesmann that is secondary. “The pictures from Ukraine are hard to bear,” he said. On the other hand, he is impressed by the willingness to help in Germany and how Europe is currently moving together.
“Our production is affected and is also at some locations,” said the Audi boss. “But we are confident that we can continue to produce for the rest of the year.” However, it is clear: “2022 is already another exceptional year.” It will “jerk in production for some time this year.” The scenarios are currently difficult to assess.
Securing the energy supply is crucial in the short term, both for private households and for industry. “Of course, gas prices and electricity prices are extremely critical.” This crisis should be used to rethink the energy supply – and to drive forward the conversion to climate neutrality with even more determination. “What is clear is that we have to move away from fossils, for two reasons: We shouldn’t be adding more CO2 to the planet. And secondly, this is a new reason: We have to break free from this dependence.”
Duesmann has been at the helm of Audi since 2020, before that he was a board member at BMW. “I started at Audi two years ago and have only experienced a crisis since then, that’s the bitter truth,” he said. “In this respect, the crisis team works very well.” Despite everything, he was able to present very good figures this week: the operating profit of the VW subsidiary has doubled to 5.55 billion euros. Sales increased by six percent to 53.1 billion euros, although fewer cars were delivered.
The auto industry has invested many billions in Russia over the past year. Volkswagen has plants in Kaluga and Nizhny Novgorod. As a subsidiary of VW, Audi has also stopped producing vehicles in Russia and exporting them until further notice. Audi manufactures the Audi Q7 and Q8 models in Kaluga.
Duesmann hopes that despite the sanctions there will be no bloc formation. “With an Iron Curtain there would only be losers” There will be a time after the war and “we will have to deal with it.” Regarding the expropriation of German plants threatened by Vladimir Putin, he said: “No one likes to be expropriated.” But he assumes that everyone will hopefully return to the negotiating table soon. “Because no matter what the scenario, it will not be better than before.”
Listen to the new episode of “The Zero Hour”:
- What Markus Duesmann treated himself to after the lockdown
- What the Audi boss means by “fully automatic tin cans”.
- Why software and data are so fundamental
Hear Andrei Pastushenko’s full story in the new episode of “The Zero Hour“.
All episodes can be found directly at AudioNow, Apple or Spotify or via Google.