Key facts
- Volkswagen CEO Oliver Blume urged workers to "pull together" amid plans for a major reorganisation.
Volkswagen CEO Oliver Blume faced boos and whistles from thousands of workers at company headquarters as he urged them to "pull together" amid plans for a significant reorganisation that could include job losses and factory closures. Workers expressed strong opposition to potential cuts and closures.
The internal conflict at Volkswagen highlights the significant challenges facing legacy automakers as they navigate a costly transition to electric vehicles and face intense global competition, potentially leading to widespread job losses and industrial shifts.
Volkswagen CEO Oliver Blume was met with boos and whistles from thousands of employees at the company's headquarters as he presented a plan for a comprehensive reorganisation, which includes potential job losses and factory closures. Addressing over 10,000 workers in Wolfsburg, Germany, Blume emphasized the necessity of drastic restructuring measures for the struggling manufacturer's future, stating, "Our plan for the future is the largest transformation programme in our company’s history. To make this happen, everyone needs to pull together now."
Blume, speaking for the first time publicly since details of the mass job loss plans emerged, indicated that the aim is to create viable prospects for all of VW's European locations within the next six to 12 months. He reportedly told employees that roughly half of the expected job cuts, estimated at around 50,000, would occur in Germany, with the other half spread internationally across approximately 170 companies. However, he stressed these figures were a "theoretical calculation" based on current costs, which he described as "about 30% above the average of comparable companies."
Management intends to prioritize voluntary personnel measures, such as phased retirement and mutual agreements, over forced redundancies, and described factory closures as a "last and most costly resort." Proposals to secure factories' futures include potentially shifting manufacturing towards the defence industry or producing electric vehicles for the Chinese market in German plants. The Osnabrück plant could cease car manufacturing as early as next year, with no manufacturing planned from 2030 at plants in Emden, Zwickau, Neckarsulm, and Hanover.
Daniela Cavallo, head of VW's works council, voiced strong opposition to factory closures and stated that trust in the executive board and CEO Blume had been damaged. She criticized Blume for a lack of clarity regarding the company's plans. Volkswagen is facing significant pressure from increased competition in China, declining sales in that market, and hefty US tariffs, in addition to long-standing issues with falling profits and overproduction in Europe.