Volkswagen CEO Faces Worker Backlash Over Massive Cost Cutting and Potential Plant Closures

Volkswagen CEO Oliver Blume is facing intense opposition from employees and labor representatives as he implements a major restructuring plan to address a critical financial state. During a meeting with over 10,000 workers in Wolfsburg, Blume stated that the company must reduce complexity and costs to remain competitive. He noted that the company is currently about 30 percent above the cost average of comparable firms. While he clarified that a frequently cited figure of 50,000 potential job cuts is a theoretical calculation based on costs rather than a fixed target, he indicated that approximately half of any necessary adjustments would occur in Germany.

Blume also addressed the possibility of closing German factories, specifically mentioning the plants in Emden, Hannover, Zwickau, and the Audi plant in Neckarsulm. He stated that there is currently no competitive occupancy plan for these sites for the 2030s, though he emphasized that closures are a last resort and have not been finalized. To reduce staff, the company intends to prioritize voluntary measures, such as retirement, mutual separation agreements, natural fluctuation, and restrictive hiring.

Works council chair Daniela Cavallo stated that trust in the corporate board and Blume has been damaged, citing a lack of transparency and concrete planning. Workers at the Wolfsburg meeting expressed their anger through boos and banners. Political tension has also emerged, as Lower Saxony Minister President Olaf Lies rejected factory closures and suggested that plants could diversify into other areas, such as defense production. A supervisory board meeting is scheduled for September 4, where the board will consider the management's plan alongside alternative proposals from the state of Lower Saxony and worker representatives.