Overview
- Volkswagen held the first of nine closed plant assemblies in Wolfsburg on Tuesday where CEO Oliver Blume presented what he called the company’s largest transformation to cut complexity, slim management and reduce costs.
- Management says structural problems have left Volkswagen about 30% costlier than peers and with margins near 3.8%, which it argues makes big cuts necessary to fund future research and keep the company competitive.
- Company scenarios discussed publicly include at least 50,000 additional job cuts, a Bloomberg-cited ‘hard’ scenario up to 100,000 layoffs, and possible removal of about 500,000 annual production units in Europe, with no final decisions announced.
- The plan faces formal roadblocks because worker representatives and the state of Lower Saxony hold decisive seats on the supervisory board, and unions led by IG Metall plus works-council head Daniela Cavallo have strongly pushed back and raised the prospect of strike action.
- Next steps are eight more plant assemblies and a critical supervisory-board decision in early September that will decide whether management can win the supermajority needed to implement closures or large workforce reductions, with shareholders such as Porsche SE pressing for faster action and management exploring options including greater use of Chinese partners.