Angela Merkel, Germany’s prime-minister, and the most important local car companies, including Mercedes, hold a virtual crisis meeting.
According to press reports, Merkel and several representatives of the German government discussed with Mercedes, BMW and Volkswagen group leaders, remotely in a conference call (of course!), on how to resume industrial production as soon as possible. Not only in Germany but throughout Europe.
The situation has been a source of concern so far. VW has previously said it would cost $ 2 billion a week to shut down production, but the biggest problem is supposedly not to be seen by company leaders. Car companies are said to be most concerned that their less-capitalized suppliers will be ruined by a lack of revenue, and these smaller companies may go out of business within a month or two.
According to Reuters, the parties agreed on the need for a Europe-wide solution to restart production and on the need to develop new methods to safely resume production. To this end, a joint task force is expected to be set up, in addition to support from government and car factories, and will be seconded by the Robert Koch Epidemiology Institute. Their task will be to develop methods to minimize the risk of contamination along production lines.
For the time being, it is difficult to predict when the European economy will resume production, but even the most optimistic predictions are no earlier than mid-May and the best forecasts are about a deeper crisis than in 2008.
And, this is not all. The liquidity problems caused by the coronavirus pandemic are also beginning to affect car manufacturers, who are forced to seek outside funding. Several car manufacturers, including Daimler, Toyota or Fiat-Chrysler, want to borrow money from banks to overcome the crisis caused by the coronavirus pandemic.
According to Bloomberg, Daimler is negotiating with different banks for a loan of around 10 billion euros, which will help the group to cope with the crisis of this period. The announcement of the loan contract is expected to be made next week. Toyota seeks financing of about 8.3 billion euros, while FCA has already obtained a credit line of 3.5 billion euros.