10.07.2026, 12:27
German Volkswagen has made a difficult decision
Source: OREANDA-NEWS
OREANDA-NEWS The German Volkswagen group has made a difficult decision. He is preparing a large-scale reduction in the model range and production volumes. Europe's largest automaker is launching a deep reorganization, in addition to laying off 100,000 employees and closing four factories, writes Reuters.
After the meeting of the supervisory board, the management announced plans to cut the product line in half, focusing on the most profitable cars. The annual production volume will be reduced from the current ten million cars to nine million. As stated by the company's CEO Oliver Blume, "we need to act without delay."
Informed sources report that Blume is considering shutting down four factories in Germany — sites in Hanover, Emden, Zwickau and Audi's Neckarsulm facility. Staff reductions could reach 100,000 people, which would be the most serious restructuring in the brand's history.
There is tremendous pressure on the manufacturer to change the business model that has been successful for decades. The reasons were inflated costs, underutilized capacities in the German market, increasing competition with Chinese manufacturers, stricter regulations and American import duties. All this has led to Volkswagen's profits falling by half in the last five years.
At a board meeting at the Wolfsburg headquarters, Blume encountered resistance from influential trade union representatives. They are categorically against deepening cuts across the entire group, including the Audi and Porsche brands. In December 2024, the employees of the concern carried out large-scale strikes. An agreement is in effect that excludes strikes for the duration of the current employment agreements.
At the same time, the family of the owners of Pih and Porsche is putting pressure on the head. Their main stake has depreciated by tens of billions of euros in recent years. In just three years, Volkswagen's quotes have lost more than half of their value.
The forecast of the Mobility Global analytical platform shows that in 2026, the concern's car plants in Germany will be loaded by only 81 percent, and by the end of the decade — by only 73 percent.
Earlier it became known that at one of the automaker's European plants, instead of updating the lawn mower fleet with efficient robotic models with artificial intelligence, the company assigned grass care to hundreds of sheep.
After the meeting of the supervisory board, the management announced plans to cut the product line in half, focusing on the most profitable cars. The annual production volume will be reduced from the current ten million cars to nine million. As stated by the company's CEO Oliver Blume, "we need to act without delay."
Informed sources report that Blume is considering shutting down four factories in Germany — sites in Hanover, Emden, Zwickau and Audi's Neckarsulm facility. Staff reductions could reach 100,000 people, which would be the most serious restructuring in the brand's history.
There is tremendous pressure on the manufacturer to change the business model that has been successful for decades. The reasons were inflated costs, underutilized capacities in the German market, increasing competition with Chinese manufacturers, stricter regulations and American import duties. All this has led to Volkswagen's profits falling by half in the last five years.
At a board meeting at the Wolfsburg headquarters, Blume encountered resistance from influential trade union representatives. They are categorically against deepening cuts across the entire group, including the Audi and Porsche brands. In December 2024, the employees of the concern carried out large-scale strikes. An agreement is in effect that excludes strikes for the duration of the current employment agreements.
At the same time, the family of the owners of Pih and Porsche is putting pressure on the head. Their main stake has depreciated by tens of billions of euros in recent years. In just three years, Volkswagen's quotes have lost more than half of their value.
The forecast of the Mobility Global analytical platform shows that in 2026, the concern's car plants in Germany will be loaded by only 81 percent, and by the end of the decade — by only 73 percent.
Earlier it became known that at one of the automaker's European plants, instead of updating the lawn mower fleet with efficient robotic models with artificial intelligence, the company assigned grass care to hundreds of sheep.
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