Volkswagen CEO Faces Intense Opposition Over Restructuring and Job Cuts

Volkswagen CEO Oliver Blume is facing significant opposition from employees and key stakeholders as he proposes a comprehensive restructuring plan to address the company's critical financial situation. During a meeting with over 10,000 workers at the Wolfsburg headquarters, Blume urged staff to pull together, stating that drastic measures are essential because the company's costs are approximately 30 percent above those of its competitors. The plan involves substantial job cuts and the possibility of closing factories in Germany. While Blume described the potential for 100,000 job cuts as a theoretical calculation based on costs, reports indicate that half of these cuts would occur in Germany and half internationally. Unions fear the total number of cuts could reach 140,000, which would put one in six German automotive workers at risk.

Representatives of the workers and the state of Lower Saxony, a major shareholder, have developed alternative restructuring proposals to challenge Blume's plan. This conflict will come to a head during the supervisory board meeting on September 4, after a previous attempt to secure approval in July failed. Workers expressed their anger through boos, whistles, and banners, with works council head Daniela Cavallo stating that trust in the executive board has been damaged. Blume noted that management prefers voluntary personnel measures, such as phased retirement and restrictive hiring, and views factory closures as a last resort. He suggested that some German plants could pivot toward the defense industry or produce electric vehicles for the Chinese market to remain viable.

The company is currently struggling with falling profits, overproduction in Europe, and increasing competition from Chinese manufacturers, alongside hefty US tariffs. While the Porsche and Piech families support the cuts to restore profits and stock value, the labor force and the state of Lower Saxony continue to push for a plan that prioritizes job security and concrete future projects over fixed reduction targets.