Germany's Volkswagen Group has halted production at four plants and is moving forward in earnest with a restructuring affecting 100,000 jobs.
On the 9th (local time), the Volkswagen Group supervisory board began discussions on the expense-cutting plan proposed by Chief Executive Officer Oliver Blume.
According to German business outlet Manager Magazin and weekly magazine Der Spiegel, CEO Blume has drawn up a plan to cut 100,000 jobs, equal to 15% of its 657,000 employees worldwide, and to additionally shut down four plants in Germany.
Also on this day, the German daily Bild reported that the job-cut target is 120,000, not the previously reported 100,000.
On 2024, Volkswagen management reached an agreement with the labor union to cut 35,000 jobs in Germany and to halt production at two German plants.
Afterward, management increased the layoff target to 50,000. The current scale is twice the previous target and would be the largest in the auto industry's history, surpassing the 74,000 at U.S. General Motors (GM) in 1991.
Volkswagen management is also said to plan to sequentially stop production by 2034 at the Zwickau, Emden, and Hanover plants and at the Audi plant in Neckarsulm, sell the facilities to defense companies, and shift auto production to lower-wage Eastern European plants.
About 40,000 employees work at those four plants alone.
Management has also reportedly proposed reducing investment from the current €180 billion a year (about 310 trillion won) to €135 billion (about 233 trillion won) by 2031.
Der Spiegel said the goal of management is to lift the operating margin to 9% by 2030 through these expense cuts, after it fell to 3.3% in the first quarter of this year.
The union is pushing back against the unprecedented layoff warning.
On this day, IG Metall (metalworkers' union), which represents Volkswagen workers, held protest rallies at the headquarters in Wolfsburg, Lower Saxony, where the board was meeting, and at 12 Volkswagen business sites.
Local media predicted the restructuring plan is unlikely to pass the board without a compromise with the union.
It is rare for Volkswagen's supervisory board, composed of 10 shareholder representatives and 10 worker representatives, to make decisions by vote without consensus.
The government of Lower Saxony in Germany, which holds 20% equity in the group, is also opposing job cuts, recently proposing joint production with a Chinese company.
The company side has reportedly even prepared a plan to bypass the Volkswagen Law by spinning off the core Volkswagen brand into a separate subsidiary like Porsche.