Nach Beinahe-Eskalation: Umbauplan für VW: Durchbruch oder Spiel auf Zeit?

On Thursday evening at 8:30 PM, it was announced that the long-winded debate had reached a breakthrough: the 20 supervisory board members of Volkswagen approved an extensive plan for the future of the group. One of the winners from that evening was undoubtedly Oliver Blume, the CEO who now has the mandate for the "most strategically profound transformation program" in VW history.

Industry experts deemed the agreement a breakthrough, and the share price rose sharply the following day. However, the future plan primarily sets the framework for the restructuring of the company, and many conflict-ridden decisions remain unresolved. Four insights after a memorable evening: consensus on the need for action. The need for reform at Europe's largest automaker is now largely a consensus.

The management, the owners including the Porsche and Piech families, the state of Lower Saxony, and the workers had not fundamentally disagreed on the need to reduce costs, simplify structures, and become more profitable. Unresolved was, however, how quickly and profoundly the restructuring comes about - and, in particular, who bears the costs.

In July, the cost-cutting plans still failed. Following a week-long confrontation, including numerous staff meetings, alarm bells rang before the recent supervisory board meeting, which was supposed to be scheduled for Friday. Management even reportedly prepared for an extraordinary general meeting if the proposal was rejected. But that did not happen.

Broad compromises are still possible in VW land. The workers' side saw the decision as de-escalation. They had cleared the way for viable solutions. IG Metall CEO Christiane Benner and VW Works Council head Daniela Cavallo spared no criticism: "The confrontational course and the management's communication in recent weeks were not fruitful," it said in a joint statement.

Both had led to widespread confusion among the workforce. Work would now begin: "We expect the management to do its homework based on the... compromise and present results promptly." The creation of 50,000 positions creates the next conflict. Volkswagen is facing shrinking demand for cars and competition from Chinese car manufacturers.

To stay competitive in the future, "a consistent adjustment of the workforce to the economic reality is indispensable." Therefore, the supervisory board granted approval for the further reduction of 50,000 positions worldwide. CEO Blume calculated that about half of them would affect Germany. The size of the number, derived from the saved costs, underscores how precarious the situation is at Volkswagen.

Only in 2024 had management and workers in Germany agreed on the collective reduction of 50,000 positions by 2030 after tough negotiations. The details of the downsizing program are still open and need to be negotiated with works councils and unions. It is assumed that the downsizing will cost the group a lot of money. VW primarily relies on age-based partial retirement and severance payments.

Layoffs at VW are ruled out until 2030 for employees, but for subsidiaries, they may be longer. By the end of 2025, the company employed almost 663,000 people worldwide, of which about 284,000 were in Germany. Four sites in Germany were particularly anxious: Emden, Hannover, Zwickau, and Neckarsulm (Audi). This uncertainty was likely to persist for the four locations.

The supervisors noted that Europe has a production capacity surplus of 500,000 vehicles and that there is no competitive reassignment for the four sites, ranging from 2031 to 2034. The management's preferred closures were not sealed. However, the search for solutions would become complicated. Even the workers' representatives recognized that the cost consequences were present and still so large that in other companies, no debate on their continued existence would be held.

For Volkswagen, however, the door remained open. Should it close again in the near future, it would likely make a big bang. How the fate of the plants will unfold remains to be seen.