Volkswagen faces decisive week as management and workers clash over restructuring
Company executives say drastic measures including up to 100,000 job cuts and plant closures may be needed to restore competitiveness.
Volkswagen's management is holding a series of extraordinary meetings this week as the company faces fierce pushback from employees over a cost-cutting programme that could eliminate as many as 100,000 jobs and close multiple factories in Germany. The talks began after senior executives signalled that earlier measures may not be sufficient to restore competitiveness.
What management says and why the cuts are on the table
Chief Executive Oliver Blume has warned the group is in a "more than critical state" and argued the company must shrink parts of its organisation to move faster and cut complexity. "We are too big. That often makes us too slow and too complicated," he told staff on the company intranet last week.
Volkswagen currently employs nearly 630,000 people worldwide. The firm already agreed reductions of roughly 50,000 jobs, mostly through voluntary departure programmes; management now says a further 50,000 role cuts may be required. Executives also plan to halve the model range, reduce overheads — especially in Germany — and lower the group's long-term production target from the record c.11 million vehicles in 2018 to around 9 million a year.
The sector faces multiple structural headwinds: mounting competition from Chinese electric vehicle makers, a delayed shift to electrification, rising production costs and geopolitical and trade pressures. Blume has warned Volkswagen produces roughly half a million vehicles more in Europe each year than the market can absorb.
Workers are reacting angrily. Germany's powerful IG Metall union and Volkswagen's works council have criticised the handling of the process; representatives described the communication as "catastrophic". IG Metall chair Christiane Benner said employees were "getting another slap" after already accepting earlier cuts. At a meeting in Wolfsburg, Volkswagen workers' council chair Daniela Cavallo said trust in Blume and management is "damaged", but "not yet irretrievably lost".
Management meetings are scheduled across several sites: nine separate meetings started on Tuesday at Volkswagen's headquarters in Wolfsburg, with talks planned in Emden, Zwickau, Braunschweig and Hanover. The situation is complicated by the ownership structure: the state of Lower Saxony holds a stake and about 20 percent of voting rights and has indicated reluctance to back some of the management's proposals. Lower Saxony premier Olaf Lies said the region is "a land of the car industry and it must remain so," and urged a search for joint solutions.
Blume describes his plan — labelled internally as Target Vision 2030 — as the group's biggest transformation programme. He argues that, despite a reported operating margin of 3.8 percent, current profitability is insufficient to fund investment in new technologies, product development and to maintain existing German production sites. Executives say factory closures in Germany would be a last resort, but that they currently do not "see a way" for some sites to remain profitable into the 2030s.
Photo: press material from the event
