Volkswagen’s management is under pressure to deliver a sustainable long-term strategy as cost-cutting measures fuel concerns over potential job losses and plant closures.
Niedersachsen’s state premier Olaf Lies, a member of the SPD party, told the German Press Agency that he expects the board to present a viable future concept. ‘Factory closures and mass layoffs cannot be the solution,’ Lies said. His comments follow Volkswagen CEO Oliver Blume’s announcement of a tightened austerity program, which has raised fears of tens of thousands of additional job cuts and the potential closure of four sites.
The powerful works council responded with outrage, convening extraordinary meetings at nine locations. Blume’s tour of threatened facilities continued on Thursday, with visits to the Chemnitz engine plant and the Gläserne Manufaktur in Dresden. Production has already ceased at the Dresden site. Sites in Emden, Zwickau, Hannover’s commercial vehicle plant, and Audi’s Neckarsulm facility are identified as at risk for the 2030s due to a lack of competitive assignments.
Blume has framed the challenges as industry-wide, citing U.S. tariffs, China’s market slowdown, and multiple geopolitical crises as pressures affecting all major automakers and suppliers. Stefan Bratzel, director of the Center of Automotive Management, said Volkswagen must achieve a ‘quantum leap’ to survive the sector’s disruptive phase. He emphasized the need for efficiency gains, organizational restructuring for speed and flexibility, and the development of entirely new growth areas.
Lies, whose state holds a stake in Volkswagen, stressed the company’s historical strength in collaborative problem-solving. ‘Volkswagen has outstanding products and technology, so we now need to restore calm to the debate so the group can focus on what it does best: building excellent, innovative vehicles,’ he said.
