The road ahead for Volkswagen's restructuring
Volkswagen faces talks over job cuts, plant closures and its U.S. strategy after stakeholders backed its turnaround plan. The company plans 25,000 job cuts in Germany and more than 500,000 vehicles of capacity reductions, with four German plants scheduled to close from 2031 to 2034.
1. U.S. and China strategy
Volkswagen's supervisory board is set to discuss unresolved restructuring details and the company's U.S. strategy. The company has lost billions of euros due to tariffs and must decide whether premium brand Audi should get its own U.S. production site. Volkswagen also wants to focus on profitable U.S. segments such as pickup trucks and large SUVs. In China, it has cut its workforce from 90,000 to 70,000, expects further reductions and faces 500,000 vehicles of production capacity reductions.
2. German labor talks
Germany's top industrial union is bound by a strike truce until January 1, 2027, and is seeking other ways to pressure management. IG Metall representatives are expected to discuss with management on September 30 whether the overhaul could breach a 2024 labor agreement, which provided for 35,000 layoffs in Germany in exchange for employment guarantees through the end of the decade and investment in plants now at risk. Unions want the planned 25,000 German job cuts to be a starting point for negotiations focused on costs rather than a numerical target.
3. Plants face decisions
Volkswagen plans to complete a European production plan by the end of June 2027. It intends to remove more than 500,000 vehicles of capacity, with the Emden, Zwickau, Hanover and Neckarsulm plants scheduled to close on a staggered basis from 2031 to 2034. Possible alternatives include defense work or Chinese partnerships, but no concrete plans have emerged. The 2024 labor agreement also allows the parties to agree to a four-day workweek if Volkswagen faces financial difficulty.
