Key facts
- Volkswagen's supervisory board approved a transformation plan.
- The plan includes cutting approximately 50,000 jobs globally.
- The restructuring aims to improve competitiveness amid rising global pressure and industry changes.
- The company is exploring alternatives for four German plants that will eventually run out of models.
- The deal averts a major clash with unions and Lower Saxony.
Volkswagen's supervisory board has approved a significant transformation plan that includes cutting approximately 50,000 jobs globally. This move is part of the automaker's strategy to enhance competitiveness amid increasing global competitive pressure, overcapacity, and technological changes in the automotive industry.
The plan, described as the most extensive restructuring in Volkswagen's 89-year history, also involves exploring alternatives for four German plants that are expected to run out of models within the next decade. These include facilities in Emden and Zwickau, with production potentially ending in 2031, Hanover in 2032, and Audi's Neckarsulm plant in 2034. Leaked documents suggested that production of certain models might be relocated to plants in the Czech Republic, Slovakia, and Poland to leverage lower labor costs and higher utilization rates.
This agreement averts a potential major clash with unions and Lower Saxony, Volkswagen's second-largest shareholder, who had opposed some of the management's initial proposals, including the idea of spinning off the passenger car and components businesses. The deal is expected to simplify Volkswagen's conglomerate structure and limit the influence of the supervisory board, where unions and Lower Saxony hold a majority.
CEO Oliver Blume stated that the plan is a "strong signal for the future of the Volkswagen Group," emphasizing responsibility for the workforce and industrial jobs worldwide. Following the news, Frankfurt-listed Volkswagen shares closed 7.9% higher, reflecting relief over the resolution. Industry analyst Ferdinand Dudenhoeffer described the situation as a "ceasefire," noting that discussions over the future of the affected plants would continue over the next ten months.
Separately, Volkswagen has initiated an investigation into the dismissal of 107 newly hired university graduates by Changzhou Xingyu Automotive Lighting Systems, a major Chinese supplier to several global carmakers, including Volkswagen. The company stated it would take appropriate steps once the findings are complete.