No Ruckus Volkswagen's Supervisory Board Approves Cost-Cutting Measures

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The big showdown on Volkswagen's supervisory board never materialized, but the cuts within the company are deep. Here's an overview ...

The supervisory board of Europe’s largest automaker, Volkswagen, has surprisingly already reached agreement on large parts of the “Future Plan 2030” proposed by the Executive Board led by CEO Oliver Blume, according to a report by dpa. The supervisors unanimously approved the package, the company announced. Just a few hours earlier, it was still completely unclear whether the VW supervisory board would be able to reach a consensus at all. This was because employee representatives and the state of Lower Saxony had announced their opposition. According to media reports, management had even prepared to convene an extraordinary shareholders’ meeting in the event the package was rejected. In that case, shareholders would have had to vote on the cost-cutting plans, it is said. But everything remained relatively calm ...

The 50,000 Jobs at VW Will Be Cut

A far-reaching agreement has now been reached. “This sends a strong signal for the future,” commented VW CEO Oliver Blume. The executive now has a mandate for the most far-reaching strategic transformation program in the history of the Volkswagen Group. However, the executive has not yet pushed all points through. The following, however, has already been approved: Worldwide, approximately 50,000 jobs will be cut by 2030, which will also include management positions. The core brand will see 35,000 jobs cut. The remainder will be distributed among the VW subsidiaries Audi and Porsche. It was not specified which brands, countries, and locations will be particularly affected. However, during employee meetings in recent weeks, Blume had stated that he expected half of the necessary adjustments to take place in Germany—a figure that was described at the time as a “rough estimate.” Now, that number appears to be a hard fact.

Here's the Situation with the VW Plants

The situation remains precarious for the four German VW plants. However, in its resolution, the Supervisory Board acknowledged that there remains a production overcapacity of 500,000 vehicles in Europe. However, no competitive follow-on production—scheduled for the years 2031 through 2034—can currently be guaranteed for the VW plants in Emden, Zwickau, and Hanover, (Germany) as well as the Audi plant in Neckarsulm (Germany). A plan for a sustainable and competitive production structure for the European plants is therefore to be presented by the end of June 2027. At the same time, the company plans to explore alternative uses for the four plants currently at risk. While no concrete closures have been decided yet, the four plants now officially have a provisional end date. Blume has repeatedly described closures as a last resort that he wants to avoid. The goal is to create viable prospects for the locations. Other options under discussion include temporarily using some plants for defense production and manufacturing Chinese VW models in Germany.