Volkswagen Ag has been keen to promote its commercial trucking unit, comprised of affiliates MAN and Scania into a coherent division that can compete with the larger competitors – Daimler AG and Volvo.
MAN SE has announced plans to restructure its production and administration of the European truck and bus division to lower expenses and cope with the recession triggered by the Brazilian issues that have weighed down on earnings. The Volkswagen AG unit went on to post a negative performance during the second quarter with an operating loss of 19 million euros ($21 million) from a profit of 154 million euros during the same period last year, according a to a statement issued Tuesday by the Munich-based manufacturer. The company added orders also recessed by 6.7 percent to 3.71 billion euros. “It is of course no easy task to initiate fundamental and cost-intensive measures to safeguard future growth in economically difficult times,” comemnted Chief Executive Officer Georg Pachta-Reyhofen in the statement. “However, we are convinced that we have to act here and now to get MAN in shape for the future.”
The European commercial-vehicle unit will lose around 1,800 jobs, equaling around five percent of its total workforce on the continent, as a means of trimming costs and restarting profit. MAN’s earnings have been bogged down by South America’s economic trouble that also prompted Daimler AG, the world’s largest truckmaker, to announce last week the Brazilian market fell 50 percent because of the regional recession.