Volkswagen CEO faces board test over factory closures and job cuts

Volkswagen’s supervisory board will meet at Wolfsburg headquarters on July 9 as Oliver Blume tries to win backing for a restructuring that could close four plants and eliminate about 50,000 more jobs. The plan would come on top of roughly 50,000 cuts already planned across the group, a scale that shows how far the company thinks it must go to restore competitiveness. Union resistance and pressure from key shareholders could still block parts of the package.

The urgency comes from a business under strain on multiple fronts. Volkswagen’s first-quarter 2026 interim report showed an operating margin of 4.3 percent, a level the company described as too low, while global deliveries fell 4 percent to 2.05 million vehicles. Deliveries dropped 15 percent in China and 13 percent in North America, and tariffs in force since April 2025 had an additional impact on U.S. deliveries. The company also said competition in China had intensified and that Chinese players were exporting that pressure into Europe.

Blume is not starting from zero. On December 20, 2024, Volkswagen reached an agreement with IG Metall and the works council that targeted more than 35,000 job cuts at German locations by 2030, a permanent reduction in German production capacity of 734,000 units, and more than €15 billion in medium-term annual savings. The deal also called for about €1.5 billion a year in labor-cost savings. It preserved job security until 2030 and avoided immediate compulsory layoffs or site closures, but only after five rounds of talks and warning strikes at German plants in autumn 2024.

That earlier compromise now looks like a floor rather than a ceiling. The new proposal would go much further, deepening the confrontation between management and labor at the center of Europe’s largest automaker by sales. Independent analyst Matthias Schmidt put Blume’s chances at roughly 50-50 and said a compromise could leave only two of the four proposed plants on the list. The stakes are not limited to factories in Germany: a board defeat would signal that the unions still have enough leverage to shape how fast Volkswagen can fund its electric-vehicle transition.

Labor pressure has already helped topple previous Volkswagen chiefs, including Herbert Diess in 2022 and Bernd Pischetsrieder in 2006. Porsche SE, Volkswagen’s largest investor, added to the pressure in May 2026 by calling for a fundamental overhaul of the business model rather than relying on cost cuts alone. The July 9 meeting will test whether Blume can push through change without triggering the same labor backlash that has repeatedly reshaped Volkswagen’s leadership.