Volkswagen Superviosory Board Approves Plan To Slash Fashions & Cut back Workforce By 100,000

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In June, Germany’s Supervisor Magazin reported that Volkswagen Group CEO Oliver Blume had a plan to shut 4 factories in Germany and get rid of 100,000 staff, each in Germany and all over the world, by 2030. It stated the plan could be made public at an organization board assembly on July 9. The Volkswagen factories affected have been stated to be these in Hanover, Zwickau, and Emden, in addition to the Audi manufacturing facility in Neckarsulm.

July 9 got here and went, and the plan didn’t get the approval from the board of administrators that Blume anticipated. The vote was 12 in opposition to and solely 7 in favor of Blume’s imaginative and prescient. As we reported on the time, “What occurs now’s anybody’s guess. Volkswagen is producing extra vehicles than it may well promote, a state of affairs that can’t go on indefinitely. It has seen its annual gross sales fall from round 12 million automobiles to simply 9 million. That’s nonetheless numerous vehicles and vans, however the revenue margins on them have fallen as effectively, placing the squeeze on buyers.”

Then, on September 3, 2026, Volkswagen Group introduced that the plan submitted in June had been accredited unanimously by the supervisory board. Insiders have constantly described Blume as “decided” to push forward together with his restructuring plan. Following his preliminary setback, Handelsblatt reported that he needed to implement the technique “in phases now — if mandatory, even in opposition to opposition from staff and the state of Decrease Saxony”

The corporate already has plans in place to cut back its workforce by 50,000. The brand new plan provides one other 50,000 to that quantity, bringing the full to 100,000. However wait, there’s extra! The plan requires eliminating half of all of the fashions at present supplied and nonetheless leaves the destiny of 4 factories in Germany up within the air.

Focus On The Lengthy Time period

In a press release, the corporate stated, “Because the automotive trade and its markets bear their quickest and most elementary shift up to now, it permits the Volkswagen Group to pave the way in which for sustainable long run success. The Future Plan 2030 units the stage to make the Volkswagen Group and its manufacturers stronger, extra aggressive and higher positioned for the longer term. The Government Board will now collectively drive the mandatory measures, collaborating with the manufacturers, subsidiaries and worker representatives.”

Blume instructed the press, “The Supervisory Board has unanimously accredited the Government Board’s Future Plan introduced right this moment. This can be a robust sign for the way forward for the Volkswagen Group. We’re taking accountability for our whole workforce, for our companions and for industrial jobs worldwide. Over the approaching years, we’ll make investments a 3 determine billion sum to make our iconic manufacturers much more engaging, stronger, and extra aggressive.”

An idea for a sustainable and aggressive manufacturing construction is to be developed for the European crops by the top of June 2027, the press launch stated. “With its decision, the Supervisory Board acknowledges that Volkswagen Group’s European capability at present exceeds demand by greater than 500,000 models and {that a} aggressive future manufacturing allocation for the Emden, Zwickau, Hanover and Neckarsulm crops can not at present be secured on a staggered foundation from 2031 to 2034. In parallel and as well as, various makes use of for these crops are being assessed.”

Greater than 40,000 folks work at these 4 factories, which have a mixed annual manufacturing capability of round 750,000 automobiles. Luckily, actions by the present US administration geared toward undermining NATO are offering new alternatives to place underutilized factories to good use for the manufacturing of navy {hardware}. Alternatives are the place you discover them.

“Folks overlook how massive the automobile trade is,” Harald Hendrikse, a managing director at Citi Analysis, instructed the New York Occasions. “The prospect of saving all of those jobs and all of this capability with the protection trade is zero.”

One other risk is utilizing a few of that extra manufacturing facility house to construct vehicles for Chinese language firms.

Time To Step Up

IG Metall and the Volkswagen Group works council, who strongly opposed the unique plan proposed by Blume, are holding their hearth, a minimum of for now. They careworn that this most up-to-date determination prevented an escalation of hostilities between administration and staff. On the similar time, they stated the administration board now needed to do its homework.

“The confrontational strategy and communication by the administration board in current weeks weren’t constructive,” stated IG Metall chief Christiane Benner and works council chair Daniela Cavallo in a joint assertion. Nevertheless, Benner and Cavallo stated that the spinoff of the core model was now off the desk and that the assault on Germany’s co-determination constructions had subsequently been efficiently fended off. They added that “no plant has been deserted, and opposite to a number of media studies, no plant closure has been finalized. As a substitute, concrete options should now be developed for all websites, and we proceed to see the administration board as having a transparent accountability.”

For years, we right here at CleanTechnica have been predicting main adjustments forward for legacy automakers. There are tens of millions of people that might want an car however who should not ready to pay $48,500 for one — the typical value of a brand new automobile right this moment within the US. There are enormous potential markets in India, Africa, and the Orient, however a lot of these individuals are not in search of a 3-row, seven-passenger SUV. They’re extra prone to favor entry-level vehicles which are easy, sensible, and low cost. Chinese language automakers are solely too comfortable to supply prospects vehicles which are considerably inexpensive.

A V8 Was Good Sufficient For My Father!

Many producers, particularly within the US, are sticking to massive, hulking fashions with tried and true infernal combustion engines. They appear to not know or care that electrical vehicles are actually a few quarter of latest automobile gross sales, with the share rising quarter by quarter. Volkswagen is making a daring transfer by proposing to prune its mannequin lineup by half. There isn’t any phrase on whether or not the fashions Volkswagen will select to chop from its lineup will probably be powered by standard or battery electrical powertrains.

There may be additionally no assure that the restructuring at Volkswagen will succeed. The most recent tariffs by the US administration are making most of the fashions it sells in America uncompetitive. Its gross sales in China have gone over a cliff, and its gross sales of standard vehicles in Europe have been trending down for the previous a number of years. The one actual vivid spot for the corporate is that gross sales of its electrical automobiles in Europe have been trending up.

Regardless of all of the comfortable discuss restructuring, there’s nonetheless an opportunity that mighty Volkswagen — which was as soon as tied with Toyota for the title of #1 automobile firm on the planet — might expertise a Nokia second and stop to exist as a serious automobile firm. The turmoil within the trade is fierce and there’s no assure that Volkswagen can climate the storm headed its manner. What occurs in Wolfsburg within the subsequent few years could possibly be a harbinger of what’s ready down the street for Ford, GM, and Stellantis as effectively. Simply because a automobile firm has been profitable previously isn’t any assure it is going to proceed to achieve success sooner or later.