Company management considers these measures necessary to remain competitive amid the growing strength of Chinese automakers, high production costs, and new trade barriers in the U.S. market, Reuters notes.
Management will have to convince shareholders and labor unions
The supervisory board meeting at Volkswagen’s headquarters in Wolfsburg was one of the most important for the company in recent years. CEO Oliver Blume is presenting a transformation program which, according to Reuters, calls for cutting another 50,000 jobs on top of previously agreed-upon measures, as well as the possible closure of four plants in Germany.
The most serious obstacle remains resistance from the unions. Employee representatives wield significant influence on the supervisory board and have already organized protests at the company’s plants, demanding that jobs and production capacity in Germany be preserved.
Pressure on the company is mounting
Volkswagen has found itself under mounting pressure from several factors at once. The company is facing intensified competition from Chinese electric vehicle manufacturers, declining profitability in Europe, excess production capacity, and U.S. tariffs on imported cars.
According to analysts, the company’s previous business model—which drove its growth for decades—requires a major overhaul.
Additional pressure is coming from the Porsche and Piëch families—the group’s largest shareholders—who are keen to accelerate reforms following a significant decline in the value of their investments in recent years.
Volkswagen remains Europe’s largest automaker and one of Germany’s largest industrial employers. Therefore, the decisions made following the supervisory board meeting could impact not only the group’s own future but also the entire European automotive industry.
Experts view the current restructuring as a test of traditional European automakers’ ability to adapt to the rapid growth of Chinese manufacturers, the transition to electric mobility, and changing global trade conditions.
If the proposed measures are approved, they could mark the largest transformation in Volkswagen’s history.
