The big showdown on Volkswagen's supervisory board didn't happen - but the cuts in the group are deep. The control committee of Europe's largest car manufacturer surprisingly agreed on large parts of the 2030 future plan of the board headed by CEO Oliver Blume on Thursday evening. The supervisors unanimously approved the package, the company said.
Just a few hours earlier it was completely unclear whether the VW supervisors would even find a common line. The employee representatives and the state of Lower Saxony had announced resistance. According to media reports, management is said to have even prepared to call an extraordinary general meeting if the package was rejected. Then the shareholders would have had to vote on the savings plans.
But it didn't get that far. There is now a far-reaching agreement. “This is a strong signal for the future,” said Blume. The manager now has a mandate for the “most strategically profound transformation program” in the history of the Volkswagen Group. But the manager hasn't gotten through all the points yet. An overview:
Reduction of 50,000 jobs as the toughest cut
One of the most consequential points concerns employment. Around 50,000 more jobs will be eliminated worldwide - including management positions. This adjustment of global personnel capacities is necessary in order to achieve the goals of the transformation program. The DAX group did not initially provide an exact breakdown between brands, countries and locations.
Blume had said at the company meetings in recent weeks that he saw half of the need for adjustment in Germany. At that time there was still talk of a “calculation size” - now the jobs are actually to be cut. A consistent adaptation of personnel capacities to economic reality is essential in view of increasing competitive pressure, changing demand and technological change.
In 2024, VW management and employee representatives had already agreed on a reduction program in Germany: 50,000 jobs are to be eliminated across the entire group by 2030. 35,000 jobs are to be cut at the core brand, the rest at subsidiaries such as Audi and Porsche.
Four plants remain under pressure
The situation remains delicate for four of the group's locations in Germany. With its resolution, the Supervisory Board noted that there is an excess production capacity of 500,000 vehicles in Europe. Competitive follow-up occupancy - staggered from 2031 to 2034 - cannot currently be guaranteed for the VW plants in Emden, Zwickau, Hanover and the Audi plant in Neckarsulm.
A concept for a sustainable and competitive production structure should therefore be available for the European plants by the end of June 2027. For the four listed plants in Germany, “alternative possible uses should be examined” in parallel and in addition.
Although no concrete closures have been decided, the plants now officially have a provisional end date. Blume recently repeatedly described closures as a last option that he wanted to avoid. The aim is to create resilient perspectives for the locations. Among other things, there is talk of temporarily using plants for armaments production and also building Chinese VW models in Germany.
The financial goals
The VW Group is to be trimmed to an annual production of nine million vehicles a year - around one million less than currently and three million less than before the corona pandemic. An operating return on sales of nine percent should be achieved by 2030. At the end of the first half of the year, the share of profit in sales was 3.8 percent. In addition, investments in fixed assets and research and development of 135 billion euros are planned for the period from 2027 to 2031
No spin-off of the core brand for the time being
From the perspective of IG Metall boss Christiane Benner and works council head Daniela Cavallo, a spin-off of the Volkswagen Passenger Cars core brand and the VW components is off the table, meaning the attack on the co-determination structures has been successfully averted.
In their initial reaction, both emphasized that an escalation had been prevented, but that the board now had to do its homework. At the same time, they criticize: “The confrontational course and the communication of the board in the past few weeks was not productive.”
VW’s situation is “more than critical”
Volkswagen is struggling with high costs and a difficult environment. “The situation is more than critical,” Blume said recently. You make a profit, but you don't earn enough to be able to finance your future. «We are oversized. This often makes us too slow and too complicated.” According to Blume, this is not a VW crisis, but rather a crisis for the entire automotive industry.
Two months ago, the management board's austerity and future plans were discussed in the supervisory board for the first time - and failed there due to resistance from employees and the state.
