Volkswagen is considering closing four German factories and cutting as many as 100,000 jobs, in what would be the biggest overhaul in the carmaker’s history, Manager Magazin reported on Friday.
The plans, which CEO Oliver Blume presented to senior executives this week, come as the world’s second-largest automaker battles tariffs, a costly shift to EVs and intensifying competition from Chinese rivals.
Members of Volkswagen‘s supervisory board have been briefed and will discuss the restructuring at a meeting on July 9, the people said.
Shutting the plants at Hanover, Zwickau, Emden and Audi‘s Neckarsulm site would put more than 45,000 jobs at risk, adding to the 50,000 cuts agreed with unions in late 2024.
Plants at the Heart of the EV Push
The four targeted sites sit close to the center of the group’s electric strategy.
Together they employ tens of thousands of workers and turn out some of its most important battery models.
Crucially, the threatened sites house electric production, not only legacy combustion lines.
Emden assembles the ID.4, ID.7 and ID.7 Tourer, the cars that anchor Volkswagen‘s mainstream electric range.
Hanover builds commercial vans including the Transporter and Multivan, alongside the battery-powered ID. Buzz.
Among the brighter spots in a patchy electric rollout, the ID. Buzz has drawn the kind of buyers the group badly needs.
Zwickau ranks among the main electric-vehicle plants in the group, retooled years ago to build cars rather than combustion models.
Neckarsulm is Audi‘s base for the A5, A6, A8 and e-Tron GT, though the A8 flagship sedan ends production this year.
A replacement flagship has been promised later this decade, leaving the site’s longer-term workload uncertain.
Wolfsburg, the group’s historic headquarters and largest plant, is not among the four named for closure.
A Sweeping Restructuring
The overhaul, first reported by Manager Magazin, would also cut planned investment by about 15% to just over €130 billion ($148 billion) over the next five years.
Much of that spending had been earmarked for software, batteries and the next generation of electric models.
Pulling back investment would slow those programs just as Chinese rivals accelerate their own.
Blume and finance chief Arno Antlitz aim to restructure the 89-year-old company from the ground up, the magazine said.
Their plan would carve the core Volkswagen brand and its parts operations into separate entities, a far more radical step than recent savings drives.
Carving out the namesake brand would reshape how the group reports a portfolio spanning mass-market cars and luxury marques.
That follows an earlier push to cut costs across the group, launched under Blume after profit nearly halved.
At the annual meeting last week, the chief executive framed the stakes bluntly: “Never has the risk situation been so high.”
A Volkswagen spokesperson declined to discuss confidential documents but said the group “must undergo far-reaching change.”
Defense Work Among the Options
Volkswagen has signaled it would rather repurpose plants than shut them.
Brand Chief Executive Officer Thomas Schäfer confirmed in May that defense-sector partnerships rank among the active fixes for its European overcapacity.
Speaking at the Financial Times Future of the Car summit in London, which EV attended, Schäfer cast outright closures as a last resort.
The brand chief said the company was looking to “find solutions with suppliers, with other areas like defense.”
Other paths would come first, he said, with shutdowns pursued only if those fell short.
VW Group has since framed defense work as a pragmatic plank of its overcapacity strategy.
Blume has repeatedly floated military transport as a fit for plants such as Osnabrück.
Unions Vow to Resist
Resistance is already hardening.
Volkswagen‘s works council and the powerful IG Metall union pledged to fight the measures in a joint statement on Friday.
Works council chief Daniela Cavallo, IG Metall president Christiane Benner and regional union leader Thorsten Groeger said they would “oppose them with all our might.”
The unions also accused the management board of reflexive cost-cutting and pressed it to do its job properly, according to the FT.
Such a scale would dwarf the reductions labor leaders accepted only 18 months ago.
Past deals have shielded German workers from forced layoffs, raising the stakes of any breach.
As one of Germany’s largest private employers, the carmaker carries outsized political weight in any job dispute.
Blume, who took charge nearly four years ago, must now align his board behind cuts certain to draw fierce opposition.
Lower Saxony, the carmaker’s second-largest shareholder, is expected to resist alongside the unions.
Negotiations are likely to be tense, with workers holding a strong voice on the supervisory board under German co-determination rules.
Its global workforce stood at 667,164 in 2025, about 43% of it based in Germany.
Shares fell to 16-year lows on Friday, signaling investor doubt that the plan can be pushed through.
Investors have grown wary of repeated restructuring promises that have yet to halt the slide.
Chinese Rivals Close In
The deeper threat traces to China, for years Volkswagen‘s most profitable market.
Knocked off the top by BYD in 2024, the German group slipped to third place in 2025, behind Geely.
Foreign automakers’ combined share of the Chinese market fell to 32% in 2025 from 57% in 2020, according to AlixPartners.
German marques have been hit hardest, after years of leaning on China for outsized profit.
That decline has reached premium brands, with BMW issuing a profit warning last week that it tied partly to weak China sales.
Group electric-vehicle sales have slid in step, sinking to their lowest since mid-2024 on falling US and Chinese demand.
Chinese manufacturers are now pressing into Europe, the group’s home turf.
BYD, Chery, SAIC and Leapmotor doubled their combined European market share through May from a year earlier, as Chinese brands surge across the region, ACEA data showed.
Dozens of other Chinese brands have launched in Europe or plan to soon, broadening the pressure.
Cheaper, software-rich models have made them credible alternatives to Europe’s incumbents.
Their reach now extends into emerging markets as well, squeezing the group where it once grew freely.
Even at home, Volkswagen’s electric push has leaned on fleet deals while Tesla courts private buyers.
