Volkswagen's supervisory board has given its approval to management's crisis plan, confirming that four factories in Germany are threatened with closure and that tens of thousands of jobs could disappear. The decision marks a significant step in the carmaker's efforts to respond to weakening demand and mounting cost pressures that have weighed on Europe's largest automotive group.
The plan, which has been under discussion for weeks, could also result in the company halving its model range. According to sources familiar with the deliberations, the board's green light allows management to proceed with formal consultations with worker representatives over the future of the affected sites, a process that is expected to be contentious given the strength of labour unions in Germany's industrial sector.
The potential closures would be unprecedented in Volkswagen's modern history. The company has long presented its German factory network as a cornerstone of its identity, and any shutdown would mark a dramatic reversal after years of expansion. Management has argued that the measures are necessary to restore competitiveness, pointing to declining sales in key markets, the costly transition to electric vehicles, and intensifying competition from Chinese manufacturers.
Worker representatives have already signalled strong opposition to the plan. Unions have warned that they will not accept job cuts without substantial concessions from management, and have threatened strikes if negotiations break down. The company's works council, which holds significant influence under German corporate governance rules, has demanded that management present a viable strategy for maintaining employment at the affected plants.
The crisis at Volkswagen reflects broader challenges facing the German automotive industry. The sector, which accounts for a substantial share of the country's exports and industrial employment, is struggling with the shift to battery-powered vehicles, supply chain disruptions, and rising energy costs. Several other German carmakers and suppliers have announced cost-cutting programmes in recent months, underscoring the scale of the transformation underway.
Analysts note that Volkswagen's situation is complicated by its complex ownership structure and the powerful role of regional governments, which hold seats on the supervisory board. The state of Lower Saxony, where the company's headquarters in Wolfsburg is located, has a stake in the group and has historically opposed large-scale job losses. Any final decision on plant closures is therefore likely to involve intense political negotiation as well as industrial bargaining.
The company has not provided a timeline for when final decisions on the factories will be made. Management is expected to enter into detailed talks with unions in the coming weeks, with the outcome likely to shape the future direction of the group. For now, the approval of the crisis plan gives Volkswagen's leadership a mandate to pursue the most sweeping restructuring in its history, even as the human and political costs of that strategy remain uncertain.