Volkswagen CEO defends 50,000 job cuts and plant closures as works council rejects plan

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Volkswagen CEO defends 50,000 job cuts and plant closures as works council rejects plan
Volkswagen CEO urges workforce to back deep cost cuts as crisis looms: meetings at German plants begin Tuesday
ContinuationVW CEO calls companys situation "more than critical" as 3.8% margin falls short of investment needs
Volkswagen workers and management are clashing over plans to cut 50,000 jobs and close multiple plants, as the company’s leadership faces mounting pressure to justify its cost-cutting strategy. On Tuesday, Volkswagen CEO Oliver Blume addressed employees at an extraordinary works meeting in Wolfsburg, the first in a series of nine gatherings across German sites including Emden, Zwickau, Hannover, and Neckarsulm 2026-08-25.
The proposals, outlined by Blume earlier this year, include shutting down the Emden, Zwickau, Hannover, and Neckarsulm plants and reducing annual production capacity in Europe by 500,000 vehicles. The CEO has described the company’s situation as “more than critical,” citing overcapacity, weak demand in China, and global competition as key challenges 2026-08-25.
Volkswagen’s works council has fiercely opposed the measures. Daniela Cavallo, the company’s works council chair, stated on Monday that “we definitively rule out operational layoffs” and that plant closures are “not an option.” She demanded the executive board present a “forward-looking strategy” rather than focusing solely on job cuts and cost reductions. Cavallo also emphasized the need to preserve existing social measures, such as partial retirement schemes and the block model for working hours 2026-08-25.
Lower Saxony’s Premier Olaf Lies, a Social Democrat, has sided with the works council, urging the company to develop joint perspectives for its plants. Lies argued that decisions cannot be based solely on financial metrics, stressing the regional impact of the sites and the importance of codetermination under the Volkswagen Law, which grants the state and labor representatives significant influence over corporate decisions 2026-08-25.
Workers have criticized the executive board’s communication as “disastrous,” with internal surveys showing widespread uncertainty among employees and their families. The company’s previous cost-cutting plans, including 50,000 job reductions approved in 2024 and the closure of the Osnabrück plant, have already strained relations. Blume’s latest proposals, which would triple the company’s profitability by 2030, failed to gain approval from the supervisory board in July 2026-08-25.
The works council has also floated alternatives, such as reviving the classic Transporter model in Hannover, which would require ending a current cooperation with Ford. The existing Transporter is developed jointly with Ford and produced in Turkey 2026-08-25.
Blume has framed the crisis as industry-wide, pointing to U.S. tariffs, price collapses in China, geopolitical conflicts, and stringent European regulations as broader pressures. The company, despite its challenges, reported billions in profits this year and distributed €2.6 billion in dividends to shareholders 2026-08-24.
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