Volkswagen’s supervisory board on a Thursday unanimously approved a comprehensive transformation plan, according to reporting from finance.yahoo.com. The freemalaysiatoday.com coverage notes that management and unions agreed to cut a total of 100,000 jobs by the end of the decade, marking what is described as the biggest-ever restructuring in the global auto industry.
Volkswagen Supervisory Board Unanimously Approves Major Overhaul
The newly approved initiative involves reducing around 50,000 positions, including management roles, which builds on another 50,000 job reductions already agreed upon. The total 100,000 cuts amount to about 15% of the carmaker’s global staff and eclipse the 50,000 job cuts made by General Motors following its 2009 bankruptcy.
Pressures Behind the Global Restructuring
Europe’s largest carmaker cited rising global competitive pressure, changing demand patterns, and technological changes in the automotive industry as core reasons for the measures. According to firstpost.com, the 10-brand group—which includes namesake brands as well as Audi and Porsche—has been hit by United States tariffs, patchy demand for electric vehicles, and fierce competition in and from China.
Volkswagen stated that a fundamental adjustment to global workforce levels was necessary beyond existing programs to achieve the goals of the transformation initiative and safeguard competitiveness. CEO Oliver Blume took the plan into a supervisory board meeting, stating that this is a strong signal for the future of the Volkswagen Group.
German Plants and Future Uncertainties
While the supervisory board approved the executive board’s future plan, discussions surrounding domestic manufacturing sites remain complex. Management and unions agreed that the long-term future of four German plants—located in Hannover, Emden, Zwickau, and Neckarsulm—could not be guaranteed, and alternative uses for the facilities are under evaluation. Shuttering these factories would mark the first time Volkswagen has closed full-scale manufacturing plants in its home country.
Leaked supervisory board documents previously reported by WirtschaftsWoche had outlined potential schedules to end production at Emden and Zwickau in 2031, Hanover in 2032, and Audi’s Neckarsulm plant in 2034, alongside reassigning various vehicle production lines to regions with lower labor costs and higher utilization rates. However, in a joint statement, representatives from the IG Metall union alongside Christiane Benner, Daniela Cavallo, and the state of Lower Saxony emphasized that no plant closures had been approved.
Governance Changes and Union Compromise
The approval process followed intense negotiations between labor and shareholder representatives. Prior to the agreement, tensions flared after media reports surfaced regarding potential job figures and plans to navigate around the supervisory board, prompting strong pushback from the IG Metall union.
As part of the resolution, the company agreed to examine curbing the supervisory board’s power. The board asked the executive board to develop a model for an evolved decision-making and group structure, with approval thresholds to be adjusted to align with standard practice. Historically, under a 1960 law privatizing Volkswagen, two-thirds of the supervisory board must approve the establishment or relocation of plants, giving labor—which holds half the seats—strong influence over plant decisions compared to the simple majority required at other German automakers.
