Volkswagen CEO Faces Growing Opposition Over Job Cuts and Restructuring Plans

Volkswagen CEO Oliver Blume is facing renewed resistance to his restructuring plans ahead of the carmaker's next supervisory board meeting.

Labour representatives and the state of Lower Saxony, a major shareholder, have prepared separate alternative proposals for Volkswagen's turnaround, according to people familiar with the matter. The proposals underline the continuing disagreement among key stakeholders over the scale of the company's planned overhaul.

The dispute comes as Blume begins a tour of Volkswagen's German facilities to seek support for measures that could involve significant job reductions and possible plant closures. More than 10,000 employees attended his first stop at the company's Wolfsburg headquarters.

Blume is expected to make another attempt to secure backing for the restructuring plans on September 4 after failing to win the necessary support at the previous supervisory board meeting in July.

Volkswagen is under pressure to lower costs and reduce complexity as it faces stronger competition from China, higher tariffs and weaker demand for its vehicles. Blume has said that up to 50,000 jobs could theoretically need to be cut to make the company's cost structure more competitive.

The proposed scale of the cuts has faced strong opposition from employees and labour representatives. During Blume's address in Wolfsburg, workers reportedly reacted negatively, while employee representatives again stressed their opposition to factory closures.

Volkswagen labour leader Daniela Cavallo said confidence in the company's leadership, particularly Blume, had been affected, although she indicated that the relationship could still be repaired. IG Metall representative Thorsten Groeger also said workers would strongly resist a strategy focused solely on layoffs and cost reductions.

Blume said the figure of 50,000 possible job cuts was based on a theoretical comparison with competitors' costs. He added that no final decision had been made on plant closures, describing them as a last option because of their high cost.

Volkswagen has considered other ways to address excess capacity at its German facilities, including possible cooperation with the defence industry and moving production of some China-focused models to Europe. No major progress on these options has yet been announced.

Vehicle production at Volkswagen's Osnabrueck plant could end as early as next year, while the longer-term outlook beyond 2030 remains uncertain for facilities in Emden, Zwickau, Neckarsulm and Hanover.