Volkswagen Board Weighs Major Job Cuts, Plant Closures Amid Union Protests

Volkswagen's leadership and key stakeholders are meeting Thursday to deliberate a sweeping restructuring plan that could involve substantial job cuts and factory closures, sparking widespread protests from the automaker's powerful labor unions.

CEO Oliver Blume is set to present the proposal to the company's supervisory board in Wolfsburg, Germany, as the automotive giant grapples with high domestic costs, intense competition from Chinese rivals, and the threat of U.S. import tariffs.

A High-Stakes Proposal

The proposed overhaul, which would be the group's most significant to date, reportedly includes the potential closure of four German manufacturing sites: Hanover, Emden, Zwickau, and the Audi facility in Neckarsulm. According to sources cited by Reuters, the plan could also double the number of job cuts to as many as 100,000 positions across the group, which includes the Porsche and Audi brands.

The push for deeper cuts comes amid pressure from the Porsche and Piech families, who control the company and have seen the market value of their investments decline by tens of billions of euros in recent years.

Union Backlash and Overcapacity

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In response to the proposed measures, Germany's influential IG Metall union organized worker protests at approximately 20 Volkswagen Group locations across the country. The union is demanding that management protect German production sites and jobs.

"This is a clear message to the board: Not on our watch!" IG Metall President Christiane Benner, who is also deputy chair of Volkswagen's supervisory board, said in a statement. The union's stance creates a significant hurdle for management, as labor representatives hold powerful positions on the board alongside owner families and the state of Lower Saxony.

Data from Mobility Global seen by Reuters underscores the challenge of underutilization facing VW's German operations. The group's domestic plants are forecast to operate at 81% capacity in 2026, a figure expected to fall to 73% by 2030. The Zwickau plant, one of the sites targeted for closure, is projected to see its utilization rate plummet from 88% in 2026 to just 42% by the end of the decade.

Context and Previous Agreements

This confrontation marks a significant escalation from a deal reached in late 2024, in which unions secured a commitment from management to avoid any plant closures in Germany. The new proposal signals that the unprecedented pressure on Volkswagen's traditional business model is forcing management to reconsider past pledges as it seeks to overhaul its cost structure and boost efficiency.