We’ve been hearing about Volkswagen’s cost-cutting efforts for months now, with the automaker announcing its first-ever closure of a German factory late last year. Deeper cuts are ahead, however, as VW CEO Oliver Blume is reportedly targeting more factory closures and significant job cuts to improve the company’s financial situation.
German publication Manager Magazin reported that Blume plans to slash up to 100,000 jobs and noted that VW would restructure some of its internal divisions into separate entities. The automaker employs more than 650,000 people globally, with almost 280,000 in Germany.
Four manufacturing facilities are also under the microscope, including three VW plants and one Audi location. Closures would not be immediate, and production would wind down once the models built at those locations are phased out.
A VW spokesperson declined to comment on the reports, but the moves would mark the most significant shift in the company’s almost 90-year history. While stopping short of confirming the reports, the spokesperson said, “The entire group, including its brands and subsidiaries, must undergo far-reaching change.” Cost-cutting efforts aim to reduce overhead costs by $12.5 billion by 2030.
Blume also reportedly plans to cut VW’s investments by almost $150 billion by 2030. The company’s electrification efforts, tariffs, and intense competition from Chinese automakers have put pressure on earnings, but the reported corrective measures will likely face fierce pushback.
German labor unions hold significant power, holding half of the seats on VW’s supervisory board. The IG Metall union is already gearing up for a fight, saying, “Should such plans be pursued, we would oppose them with all our might.” The situation could get ugly, as a 2024 deal between VW and unions stated that no factories would close this decade.
