TL;DR
Volkswagen has confirmed it will cut its model range by up to half and reduce its production capacity to nine million vehicles a year, as it battles the worst crisis in its history. But the official announcement gave no information on jobs, even as sources say CEO Oliver Blume wants to cut up to 100,000 jobs and close four German plants. The plan triggered union protests and a confrontation with the supervisory board on July 9, opening what looks like a long and bitter fight.
Volkswagen has announced plans to dismantle its wide range of products as it battles the worst crisis in its history. The automaker will reduce its model range by up to half in the coming years. CNBC reports.
The group will also reduce its production capacity to nine million vehicles a year. That figure is well below the 12 million that had been set before the pandemic.
Volkswagen currently offers around 150 model lines from brands such as Porsche, Audi and Skoda. The so-called complexity of the offer, that is, the number of equipment and configuration options, will be reduced by up to 75%.
CEO Oliver Blume framed the reform as a survival measure. It is about “making the Volkswagen Group faster, more resilient and more competitive,” he said.
The number that no one would say out loud
What the official announcement clearly left out was employment. The company did not provide information about the workforce at its supervisory board meeting, even though that is the flashpoint that dominates the story.
Sources say Blume wants to cut up to 100,000 jobs and close four German plants. This would roughly double the reductions Volkswagen had. It has already been reported that they are planning.
The places in danger are Hannover, Emden, Zwickau and the Audi factory in Neckarsulm. None of this was confirmed in the minutes of the board of directors meeting.
Why Volkswagen is in trouble
The pressure comes from several directions at once. Volkswagen faces high costs and domestic overcapacity, growing Chinese competition and U.S. import tariffs.
Those forces have been brutal for the results. The company’s profit margins roughly halved between 2021 and 2025.
China is the most acute wound, as the market that once printed money for German brands turns hostile. Chinese internal rivals now dominate, leaving Foreign automakers struggle to make a comeback.
Volkswagen is not the only one who feels it, with BMW cuts its profit forecast while China squeezes Europe. The electric transition has increased tension and Volkswagen has already Cut production of electric vehicles due to falling demand..
A fight with the workforce
The plan collided head-on with Volkswagen’s powerful unions on July 9. Union representatives on the supervisory board strongly rejected deeper cuts.
Around 400 people demonstrated in Wolfsburg, as part of a broader mobilization by IG Metall at around 20 of the group’s sites. The union warned of a “major conflict” if management forced approval of the plans.
The president of IG Metall, Christiane Benner, who is also vice-chairman of the supervisory board, was blunt. “This is a clear message to the board: not on our watch,” he said.
Workers have influence and precedent on their side. Under Blume’s late-2024 restructuring deal, unions won a commitment to prevent German plant closures, and reopening that promise is explosive.
What happens next?
The meeting was never likely to resolve anything. Rather, it reads like the first round of a long and bitter negotiation over the future of Volkswagen.
Analysts were unimpressed by the details offered, with Jefferies calling it “limited new information.” The lineup cuts are already recorded, but the human cost has been deliberately left blank.
Even as it shrinks, Volkswagen continues to spend on the technology it hopes will save it, having become Rivian’s largest shareholder through its software association. The strategy is to scale back the old business while buying into a more agile, software-defined future.
That gap is the whole story. Volkswagen has told the world how many cars it will stop manufacturing, but refuses to say how many people it will stop employing.
