VW’s profits fell 64% in the third quarter of 2024, driving the company’s share price to its lowest level since October 2010. Now, the world’s largest automaker by sales is looking to lower its expenses, with VW’s top labor leader announcing earlier this week that the company was aiming to shut at least three of its German factories, slash wages 10% and lay off thousands of employees.

“We’ve not forgotten how to build great cars, but the costs, specifically in our German operations and factories, are far from being competitive,” Chief Financial Officer Arno Antlitz told The Wall Street Journal Wednesday. “Things cannot continue as they are now.”

VW crisis is getting worse…

Volkswagen’s Q3 profit dropped a steep 64%, largely due to big losses in China. Their net profit fell from €4.34 billion last year to €1.57 billion, and revenue dipped to €78.5 billion. The group’s operating profit margin also shrank, while the… pic.twitter.com/CtumLnjXHW

— Bullion Bite (@bullionbite) October 30, 2024

VW’s profitability challenges come as consumer demand for EVs has weakened in recent years, with EV sales growing 50% in the first half of 2023 and 31% in the first half of 2024, far less than the 71% increase in the first half of 2022. As a result of this decline, the company walked back plans to sell shares in its EV business in January.

The automaker’s disappointing earnings also result from increased Chinese competition in the EV market, the WSJ reported. Deliveries in the Asian superpower fell 15% in the third quarter of 2024, largely due to lower-cost Chinese options such as BYD’s 2025 Seal EV.

VW’s cost-cutting plan would mark the first time the company has shuttered one of its German factories in its 87-year history, and has brought significant backlash from worker groups. Daniela Cavallo, head of VW’s works council, said tensions could “soon escalate” into a strike during a speech in Wolfsburg, Germany — the site of a VW factory that the company’s website describes as the “heart” of the brand.

“I’m confident that we’ll reach an agreement … but of course, I cannot rule out strikes,” Antlitz told the WSJ.

VW did not immediately respond to a request for comment.

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In an off-topic conversation, an audience member asked Musk why Tesla had not purchased the struggling EV competitor Rivian.

Musk responded:

“I wish them the best. I hope they do well. The car industry is a very difficult industry. There’s only two US car companies that haven’t gone bankrupt, and that’s Ford and Tesla. Rivian’s going to have a hard time. It’s insanely difficult to compete in the car industry. If it were not for two technology discontinuities, one being electrification and the other being autonomy, I think Tesla could not succeed without solving both.”

ELON MUSK: "The car industry is a very difficult industry. There are only two car companies that haven't gone bankrupt: Ford and Tesla. Rivian is going to have a hard time. It's insanely difficult to compete in the car industry.

If it were not for not just one, but two… pic.twitter.com/rOgdBiGJHq

— Autism Capital (@AutismCapital) October 19, 2024

Earlier this month, Rivian announced that third-quarter vehicle deliveries missed forecasts and lowered its full-year production guidance amid continued “component shortage.”

Rivian said it delivered 10,018 vehicles in the quarter and produced 13,157 units. This missed FactSet estimates of 12,670 deliveries.

The problem with Rivian is the limited affordability options for most models—they’re out of reach for the average consumer. The company expects to launch a smaller Tesla Model Y-rivaling R2, which won’t roll out onto US highways until late 2026 or even 2027.

Last month, Morgan Stanley’s Adam Jonas downgraded names like GM, Ford, Rivian, Magna International, and Phinia amid the slowdown in the auto market.

It doesn’t help when high interest rates and elevated vehicle prices have sent new monthly car payments skyrocketing higher in several years.

In a separate note earlier this year, MS Jonas pointed out that struggling EV companies could develop partnerships with legacy automakers.

Rivian recently partnered with Volkswagen, validating the analyst’s consolidation forecast in the space.

Here’s what X users are saying about Musk’s comments last night about Rivian:

in reality, Tesla has nothing to gain by buying a company that egregiously burned through 23 *billion* un-successfully ramping a single product line

— WeirdNerd (@xIronman777) October 19, 2024

Elon actually wants others to do well! This is another thing that folks don’t immediately realize. Tesla open sourced all their patents to help folks like Rivian out. He cares about the mission and wants competition out there to drive better products for all.

— ĐOGEARMY GENERAL (@TheTeslaBull) October 19, 2024

They’ve burned so much cash. Soo soooo much cash. Prognosis for the future isn’t nearly as bright as Tesla either.

That said… why would Tesla want to buy into such a cash drain? What tech do they have that’s even useful to Tesla?

— Charlie (@CharliePryor) October 19, 2024

Shares of Rivian are down 57% this year – near record lows. Short interest is about 16.5% or about 122.3 million shares.

The price war Telsa started just a few short years ago to crush competition shows that Musk continues to win.

In the gathering of about 500 business leaders at the Detroit Economic Club on Oct. 10, Trump proposed the expansion of research and development credits, increased equipment costs for small businesses and consumer tax deductions on car loan interest to appeal to Michigan voters.

The package of incentives also includes a 100 percent tax write-off for heavy equipment in the first year and full expensing for new manufacturing investments. He also proposed doubling the equipment deduction limit for small businesses from $500,000 to $1 million. Additionally, consumers could deduct car loan interest, similar to deductions on home loan interest.

“This will stimulate massive domestic auto production and make car ownership dramatically more affordable for millions and millions of working American families,” he said, noting that many people in the audience work in the auto industry. (Related: Michigan auto workers blame Biden-Harris EV mandates for industry job cuts.)

Trump also reiterated his commitment to revisiting the U.S.-Mexico-Canada Agreement (USMCA) and promised to address perceived imbalances, particularly the growing trade deficits with Mexico and China upon taking office. The U.S. goods trade deficit with Mexico increased by 23.7 percent ($130.5 billion) in 2022, while the deficit with China rose by 8.3 percent ($382.3 billion) during the same period. The USMCA, signed into law in 2020, replaced the North American Free Trade Agreement (NAFTA).

The former president presented his proposals as a “detailed plan to save the American auto industry.” In turn, he guaranteed voters that his policies would reverse job losses, claiming: “You vote for Trump, and you will see a mass exodus of manufacturing jobs, but from Mexico to Michigan, from Shanghai to Sterling Heights.”

Trump also promises tax cuts to U.S.-based manufacturers and tariff hikes to foreign investors

On Oct. 3, Trump made similar claims about the U.S. auto-manufacturing industry, announcing his plans to encourage manufacturers to produce goods in the United States by lowering corporate tax rate from 21 percent to 15 percent for U.S.-based manufacturers and proposing a 100 percent tariff on imported automobiles. Trump also pledged to cut gasoline prices by 50 percent within one year of taking office by boosting domestic oil production and doubling electricity production, which he believes will further attract manufacturers.

Moreover, Trump pledged to enhance protections for industries essential to national interests, such as steel and automotive sectors by implementing higher tariffs, a measure that Harris has consistently criticized as a tax on the American public.

“I want tariffs, but there has to be reciprocity,” Trump said, meaning an equal trade footing between the United States and other countries. “Without that tariff, every single one of the Detroit Big Three could right now be out of business.”

When asked about Chinese automakers locating plants in Mexico in an attempt to sell electric vehicles in the U.S., Trump said: “I will impose whatever tariffs are required … 100 percent, 200 percent, whatever is necessary.”

Learn the latest news regarding President Donald Trump at Trump.news. Watch as Trump says “there won’t be an auto industry left” if Kamala wins.

This video is from the NewsClips channel on Brighteon.com.

More related stories:

• Trump vows to revoke legal status and DEPORT Haitian immigrants in Springfield, Ohio if reelected in November.
• Trump’s crowdfunding campaign for those affected by Hurricane Helene raises $4 million in just a few days.
• Trump accuses Biden-Harris admin of committing ELECTION INTERFERENCE by depriving him of security.
• Trump tells supporters he plans to prosecute Google for rigging election information in favor of Kamala.
• Trump meets Zelensky, vows to negotiate peace deal “that’s good for both sides.”

Sources include:

• TheEpochTimes.com
• CNN.com
• Brighteon.com

The automaker, which filed its complaint in the U.S. District Court for the Central District of California on Oct. 3, seeks a ruling that UAW Local 230’s decision to hold a strike authorization vote breaches the terms of the collective bargaining agreement reached last year.

On the same day, UAW Local 230 in Los Angeles voted overwhelmingly to request a strike authorization if an agreement can’t be reached.

The automaker’s complaint centers on Letter 311 of their 2023 bargaining agreement, which outlines Stellantis’s $19 billion in planned investments in U.S. facilities, including the Belvidere Assembly Plant in Illinois.

Stellantis argues that these investments were never unconditional, asserting they were always subject to approval by the company’s product allocation committee and “contingent upon plant performance, changes in market conditions, and consumer demand continuing to generate sustainable and profitable volumes.”

The complaint alleges that the UAW has ignored these conditions, engaging in a sustained, multi-month campaign to pressure Stellantis into making investments irrespective of the agreed-upon contingencies. The company alleges that UAW President Shawn Fain and the union filed “sham grievances” and misrepresented the terms of the agreement to justify the strike threats.

“Defendants’ sham grievances do not authorize Defendants to engage in mid-contract strikes, and Defendants have acted in bad faith and thus violated the implied covenant of good faith and fair dealing incorporated into the [collective bargaining agreement],” the complaint reads.

The lawsuit directly challenges Fain, accusing him of misleading union members by falsely claiming that Stellantis’s planned investments were “promises” or “commitments,” despite the contract’s explicit conditional language.

“Fain baselessly alleged Stellantis engaged in ’serious violations’ of the [agreement] and recommended to the UAW membership that they authorize a strike,” the automaker’s attorneys allege in the complaint, which asks the court to award Stellantis any monetary damages that result from the strike.

In response, Fain has dismissed the company’s legal threats as “desperate actions” and that the union’s lawyers have “complete confidence in our right to strike.”

In a letter to union members on Oct. 4, Fain accused Stellantis CEO Carlos Tavares of trying to gut the company’s U.S. operations to cut costs, claiming that “the only sham is Stellantis’s promises.”

“We will not sit back and watch this company violate our agreement and threaten our jobs, our plants, and our communities,” Fain wrote, while vowing to protect American jobs.

“We are united and we are defiant,” he added.

The dispute stems from Stellantis’s decision to delay several planned investments, including a $1.5 billion project to retool its Belvidere plant to produce mid-size trucks by 2027. The company has cited economic reasons for the delays, claiming the investments are contingent on evolving market conditions.

In August, the automaker acknowledged that it was delaying some investments and said it “firmly stands by its commitment” to carry out the investments at some point.

Reuters contributed to this report.