Volkswagen reportedly plans largest-ever restructure: 100,000 job cuts, four German factories slated for closure

Volkswagen is reportedly planning its most extensive restructuring to date, which could involve cutting as many as 100,000 jobs and closing four factories in Germany. The European automotive giant faces immense pressure from high domestic costs, overcapacity, competition from Chinese automakers, and potential U.S. tariffs. The plan is set for a critical review this Thursday as key stakeholders convene.

The proposed overhaul aims to address the company's current challenges, which have seen its share price fall to a 14-year low, underperforming major competitors. Profit margins for European manufacturers like Volkswagen and Stellantis have been shrinking, while U.S. rivals such as Ford and General Motors have started to show recovery. The move is an effort to reshape the business model that has supported the group's growth for decades.

Sources suggest that CEO Oliver Blume is considering closing Volkswagen's factories in Hanover, Emden, and Zwickau, along with Audi's plant in Neckarsulm. These measures, combined with the significant workforce reduction, represent a doubling of previously discussed job cuts. The restructuring is intended to implement cost-saving measures across the entire group, which includes brands like Audi and Porsche.

The decision-making process is complicated by Volkswagen's complex governance structure, which includes representatives from the controlling Porsche and Piëch families, labor unions, and the German state of Lower Saxony. Previous restructuring efforts saw unions successfully push back against factory closures in Germany, leading to a search for alternative uses for underutilized facilities.

Worker unions, led by the powerful IG Metall, are mobilizing in protest against the proposed cuts and closures. Christiane Benner, head of IG Metall and deputy chairwoman of Volkswagen's supervisory board, has stated the union will not allow such measures and is demanding viable solutions from management and policymakers to secure German production and counter unfair competition.