Volkswagen CEO Blume pushes for up to 100,000 job cuts and plant closures; works council calls plan 'brutal'

VW CEO Blume wants to shrink the company to increase profits. Plant closures are on the table. IG Metall is preparing for a defensive battle.

The fat years at VW are long gone – even in Wolfsburg. Photo: Paul Langrock

Publication Date: 2026-07-18 18:52:00

By Anja Krüger and Pascal Beucker

A large poster hangs on the VW factory hall at the Mittelland Canal in Wolfsburg. "Lower Saxony. That's big," it says next to an image of the state coat of arms with the white horse. "Welcome to Car Country," greets the poster, which is part of an image campaign by the state of Lower Saxony.

But Car Country has a big problem. VW CEO Oliver Blume wants to squeeze higher profits out of the company and is taking a maximum confrontation course with the workforce. The works council and the IG Metall union are preparing for the largest defensive battle in the company's history. At the end of August, Blume and other board members will have to answer to employees at extraordinary works meetings in nine plants, the VW works council announced on Friday.

But first, calm returns. The Wolfsburg auto plant is going into factory holidays. From July 20, the large IG Metall union building opposite the sprawling VW plant will only be open half-days. "From August 10, 2026, we will be available again during regular opening hours," says the sign on the door to the foyer, where a bright VW Beetle is parked.

The second-hand furniture store opposite Gate 17 is closing entirely. "During factory holidays, half of Wolfsburg is empty," says the salesman. He prefers not to comment on VW management's plans. Employees streaming through the tunnel at Gate 17 to the other side of the Mittelland Canal for the shift change this Wednesday also wave it off. "I can't, won't, and mustn't say anything," says a woman as she passes.

This caution is understandable. VW boss Blume wants to massively restructure the company. No one in the company knows what that will mean for them. Blume wants to multiply the sales margin from just under 3 percent to 8 to 10 percent. That means eight to ten cents of profit remain from every euro of sales. But Blume does not want to achieve this by expanding production, but through massive shrinkage and ruthless cost-cutting. If he gets his way, the company will be completely different.

Pressure on Employees Increases

What is happening at VW now reflects the state of the German economy. Global political uncertainty, Donald Trump's tariff policy, high energy costs, sharper competition – especially from China – and sluggish demand are creating a bad mood. Instead of finding answers to these challenges, pressure on employees is increasing – from the rulers in Berlin as well as from managers at VW headquarters in Wolfsburg.

VW is the largest company in Europe by sales. Its brands include Audi, Skoda, and Porsche. The company employs around 622,900 people worldwide, 284,000 of them in Germany. There is talk of cutting up to 100,000 jobs, plant closures, and a restructuring of the company that would significantly limit employee rights. Never before have they been subjected to such fierce attacks from management. The VW works council calls Blume's ideas "brutal plans."

For many decades, VW embodied the West German economic miracle, standing for engineering, mass mobility, and reliability. The image has been tarnished for a long time, not only by recurring cost-cutting programs. Scandals such as the 2005 one involving brothel trips, with which management wanted to make the then works councils compliant, shook the image of the German flagship company. The fraud affair involving criminal exhaust gas manipulation in diesel vehicles cost VW more than 30 billion euros.

Like other German automakers Mercedes and BMW, VW is struggling with overcapacities on the global market. Fewer German cars are being sold worldwide, especially in China.