Volkswagen faces crucial vote on biggest restructuring in its history

Volkswagen’s supervisory board met in Wolfsburg with unions rallying at about 20 sites across Germany.

Blume needed backing from a board that includes union representatives, the owner families and the state of Lower Saxony. The pressure on him came from both sides: the labor bloc inside Volkswagen and the Porsche and Piech family owners, whose investments have lost tens of billions of euros in market value as the company struggles with high costs, excess capacity at home, tougher competition from Chinese automakers and U.S. import tariffs.

The proposals under discussion would go well beyond the late-2024 deal Volkswagen reached with IG Metall after about 70 hours of negotiations, the longest in the company’s history. That agreement avoided immediate plant closures, kept Volkswagen’s 10 German factories operating, reinstated job security agreements until 2030 and cut more than 35,000 German jobs by 2030, while targeting about 15 billion euros in medium-term savings. Volkswagen had originally warned of plant closures in Germany for the first time and a 10% cut in wages, before the union settlement softened those plans.

Volkswagen understands workers’ concerns but wants to streamline corporate structures, reduce complexity and lower overcapacity. Industry projections for 2026 put German car plants at only 81% of standard capacity. The overhaul under consideration could also hit Audi and Porsche operations within the wider group, not just the core Volkswagen brand.

Possible closures named in the discussions include plants in Hanover, Emden and Zwickau, as well as Audi’s Neckarsulm site. The scale being floated could reach up to 100,000 jobs, more than double the cuts in the 2024 agreement.