Volkswagen Embroiled in Power Struggle
Volkswagen is facing an internal power struggle over its future group structure, with the Supervisory Board and the Works Council pushing back against Group CEO Oliver Blume’s cost-cutting plans. The plans, which include the closure of four plants in Germany and the elimination of 100,000 jobs worldwide, have been met with resistance from both bodies.
Volkswagen now faces a months-long battle over jobs and costs. The company’s executive board, led by Blume, is pursuing a radical restructuring strategy, citing a board presentation titled “Group Target Picture” for 2030.
The plans include the closure of plants in Zwickau, Emden, Hanover, and the Audi plant in Neckarsulm. Blume plans to end production at the Zwickau and Emden plants by 2031, while the Hanover plant is expected to follow in 2032, and the Audi plant in 2034.
A meeting between Blume and the Supervisory Board was described as a setback. Blume failed to secure majority support in an initial vote on his future strategy. As no majority was reached, Volkswagen now faces a months-long power struggle.
Volkswagen’s Works Council has publicly criticised CEO Oliver Blume and plans to use works meetings to pressure him into discussing his cost-cutting plans with employees. Blume had previously ignored a deadline set for Friday, under which he was required to address the workforce.
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In a recent interview, Blume indicated that his future strategy includes alternatives to plant closures. He said there are smarter solutions than shutting down plants. He added that the cost-saving measures already implemented at German production sites are delivering results: they were able to reduce factory costs in Germany by an average of 20 percent last year alone.
The plants at risk have an annual production capacity of approximately 750,000 vehicles. Around 40,000 employees work at these four locations. They are dedicated to manufacturing models such as the VW ID.3, VW ID.4, and VW ID.5.
Zwickau and Emden are dedicated electric vehicle production sites. In both locations, Volkswagen has already reduced production from two lines to one, operating on two shifts, to address overcapacity.
It is conceivable that Volkswagen could bring in partners for the plants or repurpose them for other uses, as Blume suggested. The company’s future strategy remains uncertain, with the power struggle between the Supervisory Board, the Works Council, and the executive board likely to continue for months.
They will need to find a solution quickly.
