Labor representatives on the supervisory board blocked a significant restructuring plan at a gathering on Thursday, Reuters reported on Friday, citing firm officers.
This comes as Europe’s greatest automaker grapples with declining earnings, rising prices and competitors. Volkswagen stated on Friday that world automobile deliveries within the second quarter fell 8.6% year-on-year, a sharper decline than the earlier quarter.
The corporate’s shares had been down 0.6% round noon in European markets. Nevertheless, the main target remained on the restructuring plan, which divided the opinion of the Supervisory Board.
Throughout a board assembly at Volkswagen’s headquarters in Wolfsburg on Thursday, IG Metall, one among Germany’s largest commerce unions, organized protests throughout the nation to dam plans that embrace as much as 100,000 job cuts worldwide (greater than 15% of the workforce) and the closure of 4 German vegetation: Volkswagen vegetation in Hannover, Emden and Zwickau, and Audi’s Neckarsulm plant.
The measures had been rejected on Thursday by a supervisory committee that included labor representatives and a consultant from Decrease Saxony, Reuters reported, citing unnamed firm sources. The committee voted 12-7 towards administration’s restructuring plan over objections from labor representatives.
Volkswagen didn’t point out potential layoffs or plant closures late Thursday. As a substitute, after the assembly, Volkswagen introduced its technique for 2030, together with plans to halve the variety of fashions it provides and cut back the variety of car variants by as much as 75% in an effort to chop prices and complexity, measures that didn’t require Supervisory Board approval.
Volkswagen introduced that it’ll cut back its annual manufacturing capability to roughly 9 million automobiles in response to “quickly intensifying competitors.” This equates to car manufacturing capability of roughly 12 million automobiles earlier than the COVID-19 pandemic and roughly 10 million automobiles at present.
Different measures embrace aligning merchandise and expertise to regional markets, adjusting manufacturing capability to demand, and simplifying the Group’s company construction and funding portfolio.
“The worldwide state of affairs has worsened over the previous 12 months,” Volkswagen CEO Oliver Blume stated in a video assertion, pointing to geopolitical tensions, tariffs, excessive prices, elevated regulation and elevated world competitors.
He additionally stated Volkswagen wanted to “eliminate extra capability” and that plant closures remained a chance in the long run. Blume added: “Digitalisation, synthetic intelligence and shared companies may help improve productiveness and pace.”
Volkswagen Group Chief Monetary Officer Arno Antlitz stated the already agreed value cuts “are usually not enough within the present financial and geopolitical atmosphere.”
He stated the corporate plans to enhance its car value construction, “considerably cut back overhead prices,” improve manufacturing facility effectivity and speed up expertise improvement and decision-making.
Volkswagen has about 657,000 staff worldwide, however the firm didn’t say how the deliberate capability cuts would have an effect on its staff. In keeping with Reuters, Volkswagen’s works council has requested for readability on administration’s cost-cutting plans by Friday.
The group has repeatedly known as for a extra thorough restructuring after internet revenue fell 28% to 1.56 billion euros within the quarter to March 2026 and gross sales fell 2.5% year-on-year to 75.7 billion euros.
“The following few years will decide who will play a decisive position in the way forward for the automotive trade,” Blume stated.
