Premier of Germany’s Lower Saxony walks high wire between VW cuts and AfD

Volkswagen's massive restructuring has put Lower Saxony's premier, Olaf Lies, in a precarious position. On one hand, he must back the deep job cuts as part of the company's largest restructuring in history. On the other hand, he must fend off the far-right Alternative for Germany (AfD) party, which is gaining traction across the country. Lower Saxony, with its headquarters and six plants, is a key shareholder in Volkswagen and is set to hold municipal elections this Sunday, with polls showing the AfD making inroads.

Premier Lies is navigating this delicate balance as co-ruler of the Social Democratic (SPD) party and a member of Volkswagen's supervisory board. At a recent board meeting, Lies dropped his opposition to a restructuring plan that could result in over 100,000 layoffs as the carmaker battles challenges from China and U.S. tariffs. He argued that not agreeing to the cuts could have endangered the company even further.

Although the AfD has not overtaken Lies' SPD in Lower Saxony's polls, the gap is closing, and the state's automotive industry woes have raised concerns among traditional parties about potential voter swings to the AfD. Lies emphasized the need to assure voters that the problems can be solved, stating that failing to do so could give extremist forces a boost.

The AfD argues that Germany's automotive industry struggles stem largely from political meddling, citing the EU's 2035 phase-out of combustion engines. This criticism is shared by top auto executives and mainstream politicians. With negotiations over plant closures ongoing, the political stakes have risen significantly.

Lower Saxony's position as a shareholder in Volkswagen and a battleground for the AfD election strategy has led to heightened scrutiny of Lies' dual role. His state faces the challenge of explaining the necessary job cuts to its voters, while the AfD sees an opportunity to capitalize on any perceived failures in saving Volkswagen.