A local report said Germany's Volkswagen Group is considering far tougher restructuring than before. The job cuts could reach as many as 100,000, and the plan reportedly includes closing four additional key production sites in Germany.
On the 26th, business daily Manager Magazin cited an internal Volkswagen source as saying management is reviewing a scenario to cut about 100,000 of the company's 657,000 global employees over the coming years. The Volkswagen plants in Hanover, Zwickau, and Emden and Audi's Neckarsulm plant were mentioned as closure candidates.
The plan is known to be a proposal put forward by Volkswagen Group CEO Oliver Blume ahead of a board meeting in early next month. A Volkswagen Spokesperson drew a line on the report, saying, "We cannot confirm internal confidential documents." The person added, however, "It is clear that the auto industry and Volkswagen Group are going through a major turning point."
Volkswagen's sense of crisis stems from weak performance in China and delays in the shift to electric vehicles. Sales are wobbling in China, its core market, and the company has failed to post clear results in electrification competition, rapidly eroding profitability. The company already entered an emergency management regime starting in 2024.
Earlier, Volkswagen unveiled a restructuring plan to cut 35,000 jobs in Germany by 2030 and halt assembly operations at the Osnabrück and Dresden plants. The groupwide job-cut target later rose to 50,000, of which 28,000 retirements have been finalized. Manager Magazin assessed the newly mentioned 100,000 cuts as a massive restructuring twice the previous target.
Labor and political circles pushed back immediately. IG Metall, Germany's largest industrial union, said, "If carried out, we will use every means to stop it." Adis Ahmetovic, a lawmaker from the governing Social Democratic Party, also criticized it as "a direct provocation targeting workers, if true."
Whether the restructuring will actually be implemented is uncertain. Lower Saxony's state government, where Volkswagen is headquartered, is the No. 2 shareholder with a 20% equity stake and can exercise veto power over key decisions. In April, Lower Saxony Minister-President Olaf Lies proposed jointly producing Chinese makers' vehicles at Volkswagen plants to safeguard jobs and the production base at German factories.