Ahead of the automaker’s crucial board meeting next week, the venture’s management and labour leaders have taken a strong stance against layoffs and plant closures in Volkswagen’s largest restructuring effort to date.
Volkswagen’s radical measures include doubling the planned number of job cuts, closing factories and divesting parts of the business, moves that the management believes will revive profits and fend off growing China competition.
Blume is already conducting an outreach campaign, during which he visited Volkswagen’s electric vehicle plants in Emden and Zwickau, both considered vulnerable under the restructuring plan.
While praising employees’ efforts to cut costs, he still warned that more would be needed.
“This journey is not over. Because we not only measure ourselves against our own past performance. We measure ourselves against the best locations in Europe. Labour costs today are more than double those of comparable European locations. And when it comes to factory costs, other plants are still significantly cheaper. This is not a criticism—it is the reality against which we must measure ourselves,” Blume told staff at both sites, according to excerpts of speeches released by the company.
The supervisory board meeting is scheduled for September 4. Labour representatives and the state of Lower Saxony, which have traditionally been opposed to major job losses, hold a majority on the board.
Emden is in Volkswagen’s home state of Lower Saxony, which faces state elections in 2027. Zwickau, which Blume said set a particularly strong example with lower costs, lies in the eastern state of Saxony, outside the company’s traditional power base.
Both factories, along with Volkswagen’s campervan plant in Hanover and subsidiary Audi’s plant in Neckarsulm, currently lack a business plan that would have ensured their continuity beyond 2030.
According to the reports, Volkswagen’s labour representatives and Lower Saxony have already drawn up alternative turnaround proposals for the automaker, which they will likely introduce during the board meeting.
In the last meeting in July, Blume’s proposed roadmap failed to get the necessary support from the board members.
Poll-bound Lower Saxony’s State Premier Olaf Lies has also entered the discussion, stating, “Lower Saxony is an automotive county … and this industry must remain so,” while urging Volkswagen’s stakeholders to collaborate on solutions for the group’s future that will also protect the state’s industry.
Lies, who sits on Volkswagen’s supervisory board together with the owner families and labour representatives, spoke ahead of a series of workers’ assemblies, during which staff will have their first chance to question CEO Oliver Blume on his proposed restructuring.
Blume has warned that some 50,000 job cuts are needed to make the carmaker competitive, on top of 50,000 already agreed across the group.
Osnabrueck, about 150 km (93 miles) south of Emden, is also under threat, with vehicle production there due to end as early as 2027.
Daniela Cavallo, head of Volkswagen’s powerful works council, told reporters in Osnabrueck that layoffs and site closures would not solve problems caused by tariffs, Chinese competition and weak European demand.
“A vision for the future must consist of many different elements. It cannot … be solely about sites, labour costs and staff cuts,” she said.
Blume, who is touring Volkswagen sites to build support for the restructuring, has described plant closures as a last resort for the automaker.
As per the reports, Osnabrueck could yet be preserved through a partnership with the defence industry, although discussions have so far failed to produce a breakthrough.
In Emden and Zwickau, Blume said that Volkswagen would continue to support the sites, even if it could not secure future vehicle production.
“We will fight for industrial prospects and jobs at our locations, with partners, with investors, and with new industrial solutions,” he said.
However, the powerful labour unions have ensured that their voices are heard.
While Blume has been defending the radical cost-cutting measures as ways to offset the headwinds like growing Chinese competition, costly tariffs and a decline in demand for its cars, he has ruffled the labour leaders by reiterating that the additional 50,000 job cuts could be necessary to keep Volkswagen competitive, roughly double the redundancy programmes already agreed with unions.
When Blume visited Volkswagen’s headquarters in Wolfsburg to begin his outreach campaign among the workers, he stated, “Our plan for the future is the largest transformation programme in our company’s history. To make the transformation happen, everyone needs to pull together now.”
As per the reports, the crowd responded to the statement with boos. Banners bore slogans such as “Our jobs are not your balance sheet adjustments” and “Respect is not up for negotiation.”
Cavallo, seizing the momentum, said German factories were “an integral part” of the group.
“Our trust in this company’s executive board, and especially in its CEO Oliver Blume, has been damaged. Not yet beyond repair, but damaged nonetheless,” she said, according to excerpts of her speech shared by the works council.
“Cooperation is possible, but if VW management chooses only to pursue a path of layoffs and cutbacks, we will oppose it with all our might,” IG Metall union representative Thorsten Groeger remarked after the meeting.
Image Credit: Volkswagen