AUTONEWS
Volkswagen CEO warns of cuts: "Half in Germany and half internationally"
Oliver Blume, CEO of the German automotive group Volkswagen, told employees at a staff meeting that cost-cutting measures are necessary.
"We need to reduce complexity, consistently simplify our structures, and cut costs," Blume said in his speech at the staff meeting in Wolfsburg—where the group is headquartered—according to German media reports.
More than 10,000 employees protested against the cost-cutting plans and booed Blume in Wolfsburg, according to reports from ZDF, Germany's second public television channel.
A plan that eliminates 100,000 jobs..."Tariffs, new competitors, and geopolitical risks: the entire automotive industry is under enormous pressure," Blume said in his speech.
Volkswagen Group, owner of brands such as VW, Audi, Porsche, and Seat/Cupra, has already begun restructuring the company and announced in December 2024 the cutting of 50,000 jobs in Germany. However, in recent months, Blume has stated that it is necessary to cut another 50,000 jobs and close four factories in Germany.
Works council chair Daniela Cavallo criticized Blume's announcement regarding the layoff of another 50,000 employees, arguing that the figure was theoretically calculated to improve the company's image on the stock market.
"You can't work with a CEO who doesn't tell his employees what to do!" declared Cavallo in her speech, in which she criticized the lack of a concrete plan. "Our market share is growing, but it is still not enough," Blume added to the employees.
"We have a permanent annual deficit of 1.5 billion euros, which is why we are under great pressure to act"... Oliver Blume, CEO of Volkswagen Group
Volkswagen Group's non-production costs are 30% higher than those of similar companies. "From the current perspective, approximately half of the necessary adjustments are in Germany and the other half internationally, across a total of about 170 companies," the VW CEO added during a meeting with employees at the group's headquarters.
Volkswagen's CEO told workers at the Emden plant that cost-cutting measures at the German automaker are ongoing. The facility, located in Lower Saxony, is one of four group plants without a defined business plan beyond 2030.
Blume described plant closures as a last resort and a costly measure for the company. Even so, he made it clear to employees that the company must measure itself not only against its own past performance but also against the group's best European plants.
According to Blume, the payroll costs at Emden are more than double those of comparable facilities in Europe, and other plants continue to operate with significantly lower expenses. He presented this numerical difference as a reflection of the reality against which the company must measure itself, rather than as a direct criticism of the workers.
"Labor costs today are more than double those of comparable European facilities. And when it comes to plant costs, other units are still significantly cheaper. This isn't a criticism—it's the reality against which we must measure ourselves," Blume said.
He spoke during a series of visits to Volkswagen factories this week, part of an effort to garner support for restructuring measures amidst uncertainty regarding the future of plants lacking defined projects.
Despite the high-cost scenario, Blume told workers that Volkswagen's responsibility would not end if the group failed to secure the plant's future. The company will seek industrial solutions with partners and investors to preserve jobs at its facilities.
"This journey isn't over yet. Because we don't just compare ourselves to our own past performance. We compare ourselves to the best plants in Europe," he told the employees. Volkswagen shares closed up 3.47% last Wednesday (27) at €76.10, marking a gain of €2.55 during the trading session. Blume’s remarks reinforce that cost-cutting will remain a priority for the automaker in the coming months, with the Emden plant among the key areas of focus for management.
High costs weigh on competitiveness...Volkswagen is not at its best right now. Facing pressure from the growth of Chinese automakers, the brand saw a 26% drop in sales in China during the first half of 2026. Other factors, such as high tariffs on car imports to the United States and declining demand in Europe, have also impacted the company.
“The situation is critical,” Blume said in the statement. He added that while an operating margin below 4% is solid in the current environment, “it is not enough to generate long-term funds for new technologies, new products, and our facilities.”
German plants may operate below capacity...In July, Volkswagen revealed plans to trim its model lineup and reduce production capacity. In early August, VW’s controlling entities ramped up pressure on stakeholders, demanding drastic restructuring efforts.
Oliver Blume projects that four of the automaker's German sites—Hanover, Zwickau, Emden, and the Audi plant in Neckarsulm—will fail to reach competitive levels of capacity utilization by 2030, though he emphasized that no official decision has yet been made regarding plant closures.
According to the CEO, progress has been made in some areas of Volkswagen’s operations, but it is not enough to fully turn the automaker around—even without factoring in the pressure from new Chinese competitors or the situation at its European plants.

