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Volkswagen posts quarterly profit despite drop in sales

Volkswagen returned to profit in the third quarter as surging Chinese demand for luxury cars helped offset a 1.1% drop in vehicle deliveries due to the pandemic, sending its shares as much as 3% higher on Thursday. The German automaker's return to the black comes amid spiking coronavirus cases in Europe that led governments in France and Germany to order their countries back into strict national lockdowns on Wednesday. "The coronavirus remains a central problem," Volkswagen Chief Financial Officer Frank Witter said in a conference call with reporters. "This situation now is anything but relaxed." But Witter said the group expected the economic recovery to continue and did "not anticipate any nationwide lockdowns in larger markets." Witter said the takeover of U.S. truck maker Navistar International by Volkswagen's trucking unit Traton was an important acquisition, but the "current economic climate will not make this easy." Volkswagen reiterated it expects to post a profit for the full year, saying its business "recovered noticeably" in the third quarter as sales in China of premium vehicles, including Audi and Porsche sports cars, rose 3%. The quarterly performance was also aided by a series of cost-cutting measures launched earlier this year. Volkswagen said its net liquidity rose to 24.8 billion euros from 18.7 billion at the end of the second quarter. Excluding one-time items, third-quarter operating profit was 3.2 billion euros ($3.8 billion), down from 4.8 billion euros a year earlier, but up from a second quarter loss of 1.7 billion. In a note to clients, Jefferies analyst Philippe Houchois described the results as a "solid performance with strong cash, but relatively muted in the context of the (auto) sector recovery." Last week, German rival Daimler reported a record 24% jump in Chinese demand for its Mercedes-Benz cars, boosting its margins in the third quarter. Italian-American Fiat Chrysler Automobiles and Peugeot manufacturer PSA Group both also posted solid results this week. Witter said Volkswagen could not say for sure whether it would meet EU CO2 emissions targets this year, adding "it will be a tough race." At 1030 GMT, Volkswagen shares were up 2.9% at 129.20 euros. Related Video: Earnings/Financials Audi Bentley Bugatti Lamborghini Porsche Volkswagen

Volkswagen officially grants access to UAW in Tennessee

An audit at the Volkswagen factory in Chattanooga, TN has revealed that at least 45 percent of the facility's workers support unionization, leading the German company to grant access rights to the United Auto Workers. This is a tremendous step in the UAW's long-running and at times contentious pursuit of the workforce at Chattanooga. With this latest move, "local leadership is ready to move forward with additional conversations with the company," the union said in a statement obtained by The Detroit News. "As a starting point, UAW Local 42 will take advantage of the company's offer to establish bi-weekly meetings with Volkswagen Human Resources and the Volkswagen Chattanooga Executive Committee." The News reports that UAW Secretary-Treasurer Gary Casteel, shown above speaking at the Chattanooga plant last summer, claimed these meetings "will remind Human Resources and the Chattanooga Executive Committee of the mutually agreed-upon commitments that were made by Volkswagen and the UAW last spring in Germany. Among those commitments: Volkswagen will recognize the UAW as the representative of our members. We believe Volkswagen made this commitment in good faith and we believe the company will honor this commitment." It's important to note that despite Casteel's remarks, this is not a collective-bargaining agreement, Harley Shaiken, a labor professor at University of California, Berkeley, told The News. "But it is a step in the direction of recognition, which ultimately could lead to collective bargaining. This is not the end point," Shaiken said. "We don't know what's next. We're in unchartered territory."

CARB found another emissions-defeating device, this time from Audi

The California Air Resources Board has discovered another emissions-cheating device on an Audi earlier this summer, reports German newspaper Bild am Sonntag. The device is different from the software found in the VW Group's diesel-powered engines, as it alters the way the cars' automatic transmission shifts. The latest device, according to Bild am Sonntag, measures how far the cars' steering wheel is being turned. If the wheel is turned less than 15 degrees, indicating that the vehicle is being tested in laboratory conditions, a program in cars with certain automatic transmissions changes the way the gearbox shifts. The change in the transmission allows the engine to produce less carbon dioxide than when driving in normal conditions. When the wheel is turned more than 15 degrees, the program automatically turns off, claims Bild am Sonntag. The paper reports that Audi took the software out of its vehicles, which was used in both diesel- and gasoline-powered vehicles in Europe and the US, earlier this May after CARB discovered the program on one of the automaker's older cars. Several engineers that were connected with the emissions-cheating device have already been suspended, reports Bild am Sonntag. As the German newspaper points out, the device, which is fitted to certain Audis with an automatic transmission, is different from the cheat devices found on the automaker's 3.0-liter TDI turbodiesel V6 engine and Volkswagen's 2.0-liter turbodiesel motor, even those were also designed to beat emissions tests. The 3.0-liter engine is found in the Audi Q7, Volkswagen Touareg, and Porsche Cayenne models. Audi didn't immediately respond to our request for a comment. Related Video: News Source: Bild am Sonntag via ReutersImage Credit: Reuters / Michaela Rehle Government/Legal Green Audi Volkswagen Emissions Diesel Vehicles vw diesel scandal