Volkswagen’s 11 Billion Euro Savings Drive Pits Management Against Powerful Works Council
28.06.2026 - 10:36:43 | boerse-global.de
Volkswagen’s supervisory board meets on July 9 to decide on a restructuring plan that would mark the most radical overhaul in the company’s history. The plan, pushed by CEO Oliver Blume, calls for closing four German production sites and eliminating up to 100,000 jobs worldwide — roughly one in seven of the carmaker’s 657,000 employees.
The four plants on the chopping block are Hannover, Emden, Zwickau and Neckarsulm. Zwickau and Emden are particularly sensitive: both received massive investments in recent years to retool for electric-vehicle production. The management has already briefed senior executives on the scenarios, which aim to make the company’s cost structure competitive over the medium term.
Alongside the factory closures, Volkswagen plans to slash its product lineup from around 150 models to fewer than 100. The combined measures are expected to save €11 billion by 2030.
The works council and the IG Metall union have vowed to fight the proposals. A central obstacle for management is the existing job-security agreement, which effectively bans compulsory redundancies until 2030. Legal experts note that the announced job cuts may partly be a negotiation tactic to pressure the unions into accepting smaller concessions.
The state government of Lower Saxony, which holds 20 percent of the voting rights and has a seat on the supervisory board, has also pushed back. Minister-President Olaf Lies and his deputy Julia Willie Hamburg have rejected plant closures. The state of Saxony, where Zwickau is located, expressed concern over the site’s future.
A key element of Blume’s strategy is to spin off the core VW brand and its components subsidiary into legally independent entities. Such a move would allow the company to reassess existing structures, including the Volkswagen Law, which gives the state of Lower Saxony special rights. A company spokesman confirmed that Volkswagen is working intensively on a future plan.
Whether management can secure board approval for the plant closures remains uncertain given Lower Saxony’s opposition. The July 9 meeting will determine the fate of the plan — and of tens of thousands of jobs.
