As the holiday breaks conclude, unrest is brewing at Volkswagen. CEO Oliver Blume has characterized the circumstances surrounding Europe’s largest car manufacturer as critically tense, just ahead of a series of employee meetings. In an interview published within the company’s intranet, Blume stated, “The situation is more than critical.”
Blume emphasized that while the company is operational, urgent corrective measures are necessary. He pointed out that the current operating margin of 3.8 percent is solid but insufficient for sustainable investment in new technologies and products. “This is definitely too little to consistently generate enough resources for new technologies, new products, and our plants,” he remarked.
Cost-saving measures implemented so far, such as a 20 percent reduction in manufacturing expenses across German automotive plants last year, have not met the required thresholds. Blume noted that the company is over-extended, leading to inefficiencies and complexity in operations.
Earlier this spring, Blume announced the development of a new “target plan for 2030,” which includes a stricter focus on cost-saving strategies. He indicated his intention to finalize this plan within the year. Since then, concerns have escalated regarding the future of four plants and the potential loss of up to 50,000 jobs.
In the coming days, Volkswagen has scheduled nine employee meetings across various locations, including Hanover, Brunswick, Salzgitter, Dresden, Chemnitz, and Kassel-Baunatal. These meetings, starting on August 25 in Wolfsburg, aim to address employee queries, with subsequent gatherings planned in Emden and Zwickau, concluding in Hanover on August 31.
What About Volkswagen’s Polish Plants?
Regarding the plants in Emden, Hanover, Zwickau, and Neckarsulm, which are deemed at risk, Blume reiterated that there is currently no competitive future envisioned for these sites in the 2030s. However, he clarified that no specific decisions regarding plant closures have been made. The absence of additional production orders does not necessarily indicate a factory shutdown. Notably, he did not mention any of the Polish facilities located in the Greater Poland region, suggesting that they may be spared from the cuts, or at least not face drastic reductions.
Blume indicated that if solutions for specific locations cannot be found, Volkswagen’s responsibility does not end there. “Plant closures are always the most expensive and ultimate solution,” he said. If efforts fall short, the focus will shift to creating new opportunities in collaboration with partners, investors, and innovative industrial solutions.
He referred to the often-cited figure of 50,000 threatened jobs as a “not rigidly defined target,” explaining that it stems from cost objectives relative to competitors and highlights the scale of necessary actions.
