Is it ‘over and out’ for Audi Brussels?

On Tuesday evening, the management of the Audi Brussels plant called for an extraordinary works council and announced ‘the restructuring intention’ for the plant. The current production of the Q8 e-tron will be stopped before the end of 2026, and almost half of the workforce (1,410) will already lose their jobs this year, probably in October. Next year, another 600 would be asked to leave.

In the spring, dark clouds are packed above the Audi plant in Forest (west of Brussels). At the time, it was decided that the successor of the Q8 e-tron would be transferred to Mexico and possibly China and that the company had to search for alternatives for the assembly plant as of 2027.

Meanwhile, the demand for the Q8 e-tron, Audi’s first and oldest fully electric model, has collapsed. Where the plant still assembled 53,555 of these electric luxury SUVs in 2023 (7% more than in 2022), the demand has dwindled this year, particularly so with the venue of the brand new Q6 e-tron, a slightly smaller but much more modern and somewhat cheaper electric SUV produced near Audi’s headquarters in Germany.

Audi now counts on a yearly production of less than half for 2024, while it expects to sell only 6,000 Q8 tons of the current model in 2025.

Alarm bells

Audi management already announced in March that the temporary workers (some 400) would be asked to find another job. Alarm bells rang on a governmental level, and Belgian Prime Minister De Croo sat together in June with Audi management to create a special task force to examine possible solutions and see what the Belgian government could do to keep the plant alive.

At that moment, Audi management promised to examine all possible alternatives for the plant’s future. It said no decisions would be made before November 2024, when the Audi management and board would decide on the general Audi plans for the coming years.

Today, Audi surprised everybody by assembling the extraordinary works council to announce possible structural changes. It’s an obligation in Belgium as part of the so-called ‘Renault law’, voted at the end of last century when Renault pulled the plug on its assembly plant in Vilvoorde (east of Brussels).

The current move may surprise the workers, unions, and the Belgian government, which hasn’t reacted yet, but it seems to be very carefully planned by the Audi management. Currently, there are no Q8 e-trons built at Audi Brussels, and the workforce is in so-called ‘technical unemployment’ just before the work’s yearly vacation starts.

It’s an interesting period to announce bad news as the workforce isn’t gathered in the factory and is busy planning its summer vacation. To avert possible ‘hostage taking’ of already built Q8 e-trons, most have also been removed from the factory premises and sent into the distribution channels.

What future?

Earlier, when the Audi management and the Belgian politicians sat together, several possible solutions were suggested. One possibility was to manufacture a top-notch electric Audi, eventually called Q10, in Brussels in relatively small numbers but with very high-profit margins.

Another possibility is Audi Brussels becoming a supplier to many other Audi plants worldwide for the particular electric parts of the models to come. Of course, everything will depend on what the top managers decide, and apparently, they’re not very inclined to work out a viable solution for the Brussels plant. Hubris is an uncommon state of mind when talking about automotive CEOs.

The VW Group said in a statement on July 9th that the costs of finding an alternative use for the Brussels plant or closing it, as well as other unplanned expenses, would total up to €2.6 billion in the 2024 financial year. The group lowered its forecast for operating returns to 6.5-7% from 7-7.5%.

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