Volkswagen is weighing a restructuring so vast it would have no precedent in automotive history. The German carmaker is considering closing four of its German factories and ramping up job cuts to as many as 100,000 — a combination that would surpass even General Motors’ sweeping reductions of the early 1990s and the crisis-era cuts of 2009. Members of VW’s supervisory board have been briefed on the plans, which are set to be formally discussed at a July 9th meeting.
The four plants under consideration for closure are in Hanover, Zwickau, Emden, and Audi’s Neckarsulm site. Closing all four would put more than 45,000 jobs at immediate risk — added to the 50,000 cuts already planned, bringing the total to up to 100,000. VW CEO Oliver Blume presented the proposals to senior executives earlier this week to build support for cuts that are almost certain to face fierce opposition from Germany’s powerful unions and the state of Lower Saxony, which holds a significant stake in the company.
Industry analysts are watching the situation with a mixture of recognition and scepticism. “The VW Group has suffered from years of neglect in readjusting workforce numbers due to the stranglehold the regional government and trade unions have on the company,” independent auto analyst Matthias Schmidt said. “The market reality is hitting the German giant hardest.”
A Volkswagen spokesperson declined to comment on what the company called “confidential documents,” but added: “The entire group, including its brands and subsidiaries, must undergo far-reaching change.”
Why Volkswagen Is Here
The pressure on VW is real and multi-directional. Demand in Europe has weakened significantly. US tariffs on car imports have squeezed margins. And Chinese electric vehicle manufacturers — once considered a distant threat — have displaced Volkswagen in the world’s largest car market with extraordinary speed.
VW had been China’s leading automaker for years. BYD knocked it to second place in 2024. By 2025, VW had fallen to third. Non-Chinese automakers’ combined market share in China fell from 57% in 2020 to 32% in 2025, according to AlixPartners. The damage is no longer contained to mass-market brands either — BMW issued a shock profit warning last week citing weak Chinese sales and the impact of the Iran war on energy costs. VW’s pain is the industry’s canary.
Chinese manufacturers are simultaneously expanding aggressively into Europe. BYD, Chery, SAIC, and Leapmotor doubled their combined European market share through May compared to a year ago. Dozens more Chinese brands have launched or are preparing to launch in Europe. The competitive pressure that forced VW into crisis in China is following it home.
Blume and Chief Financial Officer Arno Antlitz are seeking to fundamentally restructure the 89-year-old company — including spinning off the core VW brand and parts operations into separate entities, according to Manager Magazin, which first reported the plans. Investment would be cut by approximately 15% to just over €130 billion over the next five years.
VW shares were trading at 16-year lows on Friday, down 3.4%, with investors apparently sceptical the plan would succeed even at this scale. The stock has lost nearly 60% of its value since Blume took over as CEO.
Why the Plan May Not Survive Contact With Stakeholders
Volkswagen’s unique governance structure makes any aggressive restructuring extraordinarily difficult to execute. The company’s works council and labour representatives hold significant formal power over company decisions under German law. The state of Lower Saxony, as the second-largest shareholder, has veto-like influence on certain strategic decisions. And IG Metall, Germany’s most powerful union, covers most of VW’s German workforce.
When Blume first attempted to close German plants in 2024, the resistance was immediate and effective. Strikes followed. A prolonged standoff with IG Metall and the works council eventually forced management to retreat. This time, the proposed scale of cuts is considerably larger — and the opposition is already mobilising before any formal decision has been taken.
VW’s works council and IG Metall issued a joint statement on Friday: “Should such plans go ahead, we would do everything in our power to prevent them.” The premier of Lower Saxony said flatly that the state would not agree to the plan. Porsche SE, the investment vehicle of the Porsche and Piech families and VW’s largest shareholder, declined to comment.
One shareholder representative cut to what many analysts see as the fundamental flaw in the strategy. “The high costs are merely a symptom, not the cause,” said Ingo Speich of Deka, a VW shareholder. “VW must bring attractive products to market that are in high demand; that would put an end to the debate over costs.”
The July 9th supervisory board meeting will be the next major test of whether Blume can build the internal consensus required to push anything close to this plan forward.
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