Clearcutting at VW: Four plants and 100,000 jobs on the verge of extinction

Four plants with 40,000 employees are to be closed by 2034. Production in Zwickau and Emden is scheduled to end in five years. The commercial vehicle plant in Hanover, where the vans and multivans are produced, is scheduled to follow by 2032, followed by the Audi plant in Neckarsulm two years later. At the same time, VW wants to cut another 50,000 to 60,000 jobs by 2030. According to Spiegel, Blume also wants to reduce investments by 45 billion euros to 135 billion euros over the next five years.

Relocate production to Eastern Europe

Blume’s plan is to bundle production of the affected models in more cost-effective Eastern European factories in the future. Further investments are to be made in the VW plant in Bratislava, Slovakia, and in the Audi plant in Györ, Hungary. The Bratislava site is the only plant in the world where vehicles from the four Group brands VW, Audi, Porsche and Skoda are built. These include the VW Passat, the Audi Q7, the Porsche Cayenne and the Skoda Superb. The new T7 transporter is produced in Turkey.

Other uses are being sought for the German locations affected by the closures – from sales to defense companies to the production of cars developed in China. The latter is particularly an option for Zwickau.

Spinning off the core features?

In order to circumvent the expected resistance from the state of Lower Saxony, which has a blocking minority on the supervisory board, there is an explosive option: spinning off the core VW brand would de facto undermine the so-called VW law, which gives the state extensive say.

Insider information shows that Blume is serious: the CEO is said to have had his executives sign the plan in advance – an unusual measure to close his own ranks.

Supervisory board in stalemate

But approval of the austerity package is considered extremely uncertain. After the resignation of ex-Renk boss Susanne Wiegand, there is a stalemate in the control committee. The employee side around the head of IG Metall Christiane Benner and works council leader Daniela Cavallo has already rejected the plans as an “irresponsible threat” and announced massive resistance.

Political resistance is also forming. Prime Minister of Lower Saxony Olaf Lies (SPD) categorically rejects factory closures and instead calls for a European strategy against price pressure from China. Chancellor Friedrich Merz recently emphasized that the federal government is working on better framework conditions for the competitiveness of German companies.

The situation is getting worse dramatically

VW had already decided to cut 35,000 jobs in Germany at the end of 2024 and sealed the end of car production in Osnabrück and Dresden. Since then, the situation has worsened further. The operating return is a meager 3.3 percent, but it is expected to triple by 2030.

In addition to the slump in sales in China, US President Donald Trump’s tariffs are also weighing on the company – loudly Spiegel with five billion euros per year.

“We will also have to reduce excess capacity,” said a company spokesman before the meeting. Although the board of directors and supervisory board shared the concerns of the employees, the aim was to make the group “more robust and competitive”.

Whether this plan will work may be decided as early as Thursday. Or the power struggle between top management, employee representatives and politicians is entering the next round.