Volkswagen faces fierce union resistance as executives consider cutting 100,000 jobs and closing four German factories amid restructuring.
Volkswagen is facing one of the most critical moments in its history as its supervisory board meets on Thursday to consider a sweeping restructuring proposal that could see up to 100,000 jobs eliminated and four German factories closed amid mounting financial pressures.
The meeting, scheduled to begin at the automaker’s headquarters in Wolfsburg, comes as protests erupt across approximately 20 Volkswagen Group sites in Germany, with workers opposing the proposed measures and demanding stronger commitments to safeguard domestic manufacturing.
Europe’s largest carmaker is grappling with rising production costs, excess manufacturing capacity in Germany, intensifying competition from Chinese automakers, and tariffs on vehicle imports into the US. The combination of these challenges has placed unprecedented pressure on the company to overhaul the business model that has underpinned its growth for decades.
Chief Executive Officer Oliver Blume is expected to seek support from the supervisory board’s influential labour representatives for deeper cost-cutting measures across the Volkswagen Group, which includes the Audi and Porsche brands.
Blume is also under pressure from the Porsche and Piech family shareholders, who have seen tens of billions of euros erased from the market value of their investments in recent years.
According to sources familiar with the discussions, Volkswagen is considering what would become the largest restructuring programme in its history. The proposals include shutting down four German plants—Hanover, Emden, Zwickau and Audi’s Neckarsulm facility—while increasing planned job cuts to 100,000, double the number currently under consideration.
The restructuring discussions are further complicated by Volkswagen’s supervisory board structure, which comprises representatives of the controlling families, labour unions and the Lower Saxony state government, often making consensus difficult to achieve.
The latest proposals represent a significant departure from an agreement reached in late 2024, when unions secured a commitment from management to avoid factory closures in Germany. Following that deal, Volkswagen instead explored alternative uses for underutilised facilities.
Those efforts have included a prolonged search for a defence industry partner to utilise the Osnabrueck plant, as well as evaluating the possibility of producing vehicles designed for the Chinese market at German factories.
Data from Mobility Global, seen by Reuters, underscores the scale of Volkswagen’s overcapacity challenge. The figures indicate that the group’s German vehicle plants are expected to operate at 81% of standard capacity in 2026, with utilisation projected to decline further to 73% by the end of the decade, even after the anticipated removal of the Osnabrueck facility from its production network.
Among the four plants reportedly facing closure, Zwickau is forecast to perform best in 2026 with an 88% utilisation rate. However, that figure is expected to plunge to just 42% by 2030.
Ahead of Thursday’s board meeting, Germany’s largest industrial union, IG Metall, mobilised workers at around 20 Volkswagen locations across the country in protest against the proposed restructuring.
In a statement, IG Metall President Christiane Benner, who also serves as Deputy Chair of Volkswagen’s supervisory board, delivered a strong warning to management.
“This is a clear message to the board: Not on our watch!”
Benner urged both the company and policymakers to develop strategies that would preserve manufacturing capacity and protect German industry from growing international competition.
“In difficult times, we stand together and demand that the group and policymakers come up with ideas and plans to ensure full capacity at our plants and protect us from unfair competition,” she said.
The outcome of Thursday’s supervisory board meeting is expected to determine whether Volkswagen proceeds with one of the most extensive restructuring programmes ever undertaken by a European automaker, as it seeks to restore competitiveness in an increasingly challenging global automotive market.