Audi made €95 million after tax in the third quarter. A year earlier it made €718 million. That is an 87% fall — and it is the kind of number that stops describing a crisis and starts describing a company idling just above zero.
The context makes it worse. Nine months in, Audi has earned €1.22 billion on €42 billion of revenue, both down sharply, and it has cut its full-year guidance. Finance chief Jürgen Rittersberger said the figures show "the need for action at Audi is high and brooks no delay".
The company names the causes itself: the collapse of the Chinese market, especially for combustion-engined cars, rising competitive intensity, growing export pressure from Chinese manufacturers into Europe, uncertainty from the Middle East and the energy costs that come with it — and US tariffs. The decisive structural disadvantage hides in a subordinate clause: Audi has no factory of its own in the United States. Volkswagen has Chattanooga, BMW has Spartanburg, Mercedes has Vance. Audi does not, which is why the tariffs bite the Ingolstadt group harder than its rivals. For comparison, Mercedes made €1.52 billion in the same quarter. BMW reports next week.
The cuts are already underway. Last year's future agreement provides for up to 7,500 fewer jobs in Germany by 2029. In early October Audi pulled the so-called bad-weather clause, a 2019 arrangement that forces negotiations over savings when the economic framework deteriorates significantly. Further reductions are now being fought over, and even the closure of the Neckarsulm plant is on the table. What any of this means for the German sites, Audi would not say; the steps are to be worked out with the works council.
And then there is the appearance that became the second problem. On the sidelines of negotiations over a plant in the US state of Georgia, chief executive Gernot Döllner appeared on stage with Donald Trump over the weekend. The president announced Audi's plans at a campaign rally before calling Döllner up, who thanked him for the support. The criticism has not let up since, including calls for his resignation — less over the plant, which is widely seen as sensible, than over the timing: days before the midterm elections on 3 November.
Critics accuse Döllner of breaking Audi's own rules, which exclude such appearances. He has defended himself by saying the company was asked, in the course of the talks, to present its plans publicly alongside the president, and that one does not decline such an invitation out of respect for the office. Rittersberger declined to give details of the Georgia deal — infrastructure, labour, incentives. That large sums are involved is plausible. Whether the deal reduces tariffs before production starts, he would not say.
The supervisory board is meeting on it at short notice. That is where the two problems meet: a manufacturer that needs a US plant to escape tariffs now has a chief executive who gave up his company's political neutrality to get one, and the board has to decide whether that was a price worth paying.
A quarter with €95 million of profit can be explained by cost discipline. A quarter with €95 million of profit while the chief executive is fighting for his job over a campaign rally is a different story. For the workforce in Neckarsulm, only one number will matter in the end: the one that decides the plant.
