Volkswagen plans cost cuts; plant closures possible

Finances Volkswagen Plans New Cost-Cutting Program—Plant Closures Possible

2026-02-18 Source: dpa 2 min Reading Time

According to a media report, Volkswagen wants to save a further 65 billion U.S. dollars. Plant closures have not been ruled out.

According to media reports, Volkswagen wants to save a further 60 billion euros.(Image: Volkswagen) — According to media reports, Volkswagen wants to save a further 60 billion euros.
(Image: Volkswagen)

According to a press report, the Volkswagen Group is planning a new cost-cutting program with a volume of around 65 billion U.S. dollars. According to Manager Magazin, costs are to be reduced by 20 percent by 2028. The magazine reports this, citing internal information. The reason for the move is the sluggish sales in China and the US tariffs.

Therefore, the cost-cutting efforts to date were not enough, it was said. Plant closures could not be ruled out, nor could further job cuts beyond the 35,000 already announced. Manager Magazin did not provide any details.

VW reacted cautiously and referred to the savings programs already underway at all brands. As a result, the company has already achieved savings in the double-digit billion dollars range, said a spokesperson. "This has enabled the Group to cushion the geopolitical headwinds—such as the tariffs in the USA—and remain on course." Group CEO Oliver Blume will provide an interim update at the annual press conference on March 10.

Works Council: With Us, There Will Be No Plant Closures

The Works Council was more explicit. The article appears "more like a description of the state of the efficiency programs that have been running for a long time", according to a Works Council statement for the workforce on the VW intranet. Head of the Works Council Daniela Cavallo once again spoke out clearly against plant closures on the intranet: "With us, there will be no plant closures."

She is aware that the Group is still in a difficult situation, Cavallo is quoted as saying. "That's why we at Volkswagen AG did everything we could at the end of 2024 with the December compromise to improve competitiveness and make the impact on the workforce socially acceptable. With this agreement, we have expressly ruled out plant closures and compulsory redundancies."

After a long struggle, the company and trade union agreed on a restructuring program at the end of 2024, which provides for the reduction of 35,000 jobs in Germany by 2030. In return, plant closures and compulsory redundancies were ruled out. The job cuts will take place primarily through partial retirement, early retirement and severance payments.

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