Wolfsburg. The Volkswagen Group is facing a drastic restructuring. Europe's largest car manufacturer wants to cut a further 50,000 jobs in the coming years, reduce the number of its models and hold fewer company investments. Four plants are still in jeopardy.
Surprisingly, on Thursday evening, after weeks of arguments, the supervisory board unanimously approved large parts of a restructuring concept by the board of directors led by CEO Oliver Blume. The threat of further escalation between the board of directors, the state of Lower Saxony as the main shareholder and the employee side is therefore off the table.
By approving the Board of Directors' 2030 future plan, Volkswagen is setting the course for the company's sustainable and long-term success, the group said. “The 2030 future plan creates the conditions to make the Volkswagen Group and its brands more efficient, more competitive and more future-oriented.”
CEO Blume spoke of a strong signal for the future. Chairman of the Supervisory Board Hans Dieter Pötsch said that the Supervisory Board was convinced that “its implementation will ensure the long-term future and competitiveness of the Volkswagen Group.”
Lower Saxony's Prime Minister Olaf Lies referred to enormous challenges for Volkswagen and the German auto industry. “It is all the more important that we now take a common path towards the necessary transformation,” said the SPD politician.
The deputy chairwoman of the supervisory board and first chairwoman of IG Metall, Christiane Benner, emphasized: “With the future plan that has now been approved, we are facing the huge challenges together with the board of directors and shareholders.” According to Group works council leader Daniela Cavallo, the future plan is “a necessity in order to lead our group successfully into the next decade, without the associated projects being one-sidedly at the expense of the employees.”
According to VW, the 2030 future plan is the “strategically most profound transformation program in the history of the Volkswagen Group”. Accordingly, a “concept for a sustainable and competitive production structure” should be developed for the European plants by the end of June 2027.
The Supervisory Board has noted that there is an excess production capacity of 500,000 vehicles in Europe in the Volkswagen Group and that “currently no competitive subsequent occupancy can be guaranteed on a staggered basis from 2031 to 2034” for the Emden, Zwickau, Hanover and Neckarsulm plants: “For these plants, alternative uses are being examined in parallel and in addition.”
In addition to the existing programs, further fundamental adjustments to global personnel capacities are necessary, Volkswagen also announced. A consistent adaptation to economic reality is essential, according to the planned reduction of around 50,000 jobs.
In addition, the Volkswagen Group will streamline its model range by around 50 percent and the complexity of the offering by around 75 percent by 2035. The focus will be on the most attractive vehicles. The aim is also to achieve “leaner management structures” and “shorter decision-making processes”.
The portfolio of investments and businesses will be “consistently reduced to their strategic and economic contribution to the core business”. It should be tightened by around a third.
In a joint reaction, IG Metall and the group works council emphasized that an escalation had been prevented. The board must now do its homework. In their view, a spin-off of the Volkswagen Passenger Cars core brand and the VW components is off the table. Benner and Cavallo emphasized that no plant had been abandoned and no plant closure had been sealed. However, the union and the works council repeated a central criticism: “The confrontational course and the communication of the board in the past few weeks was not productive.”
The car expert Ferdinand Dudenhöffer described the future plan as a light version. “The plant closures have not been decided, but they have not been suspended either,” he said. At least the compromise is better than the torturous public discussions of the past 24 months.
Now it's time to talk about improvements, product plans or plant closures in the next few months. From the point of view of the industry expert, there is likely to be a certain level of relaxation, but still far from “peace”.
