VW CEO Urges Cost Cuts Amid Worker Protests Over Job Fears

Key facts

• Volkswagen CEO Oliver Blume urged workers to increase savings efforts, stating costs are too high compared to rivals.
• The automaker's restructuring plan could lead to job losses and factory closures.
• Blume indicated that approximately 50,000 job cuts are a theoretical calculation, with half in Germany and half internationally.
• Management favors voluntary measures like phased retirement over forced layoffs.
• The head of VW's works council, Daniela Cavallo, expressed damaged trust in CEO Blume.

Volkswagen CEO Oliver Blume faced boos and whistles from thousands of employees at the company's headquarters as he presented a plan for a comprehensive reorganization, which includes potential job losses and factory closures. Addressing over 10,000 workers, 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 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.