Key facts
- Volkswagen is considering closing four German factories: Hanover, Zwickau, Emden, and Audi's Neckarsulm site.
- The potential closures could affect over 45,000 jobs.
- The automaker's governance structure, influenced by the state of Lower Saxony and labor representatives, is facing scrutiny.
- The 'Volkswagen Law' grants Lower Saxony a blocking minority and requires high majorities for production plant decisions.
- Porsche SE, controlled by the Porsche and Piech families, holds a majority voting stake in Volkswagen.
Volkswagen is reportedly considering the closure of four German factories, including sites in Hanover, Zwickau, Emden, and Audi's Neckarsulm facility, a move that could put over 45,000 jobs at risk. This potential action comes as the automaker faces increasing pressure from Chinese competitors and heightened scrutiny of its unique governance structure.
The company's structure, shaped by its post-war history and the "Volkswagen Law" enacted in 1960, gives substantial power to the German state of Lower Saxony and labor representatives. Lower Saxony holds a 20% voting stake, effectively a blocking minority, and decisions regarding production plants require a two-thirds majority on the 20-member supervisory board, which includes 10 labor representatives.
Porsche SE, controlled by the Porsche and Piech families, holds a majority voting stake of 53.3%, while Lower Saxony has 20% of the votes and Qatar holds 17%. Investor criticism has long targeted this governance setup, citing shortcomings and contributing to pressure on Volkswagen's share price, which has traded near 16-year lows.
The Emden plant, founded in 1964, initially produced the Beetle and now exclusively manufactures electric vehicles for the ID. series, employing over 7,700 people. The Hanover factory, employing around 14,000, produces the T-Series camper vans and the ID. Buzz electric van, alongside components like heat exchangers and cylinder heads. The Audi site in Neckarsulm, with 15,509 employees as of March 2026, produces combustion engines, hybrid technologies, and electric vehicles, including variants of the A5, A6, A8, and the e-tron GT.
The Zwickau plant, fully converted to electric mobility at a cost of 1.2 billion euros, began producing electric vehicles in June 2020. It manufactures models like the Volkswagen ID., Audi Q4 e-tron, and Seat Cupra Born, and also produces bodies for the Bentley Bentayga and Lamborghini Urus, employing 8,000 workers.