Volkswagen’s board of directors approves the management’s restructuring plan
Unexpected things often happen: VW’s supervisory board approved the management team’s restructuring plan at an emergency meeting. This move comes as a surprise, as tensions had been anticipated earlier. According to Volkswagen, the vote was unanimous—likely because deciding on the potential separation of the core Volkswagen brand has temporarily reduced urgency.
According to several news agencies as well as “Handelsblatt” and “Spiegel,” a compromise emerged unexpectedly at VW’s board meeting on Thursday evening. The presidium had met earlier, followed by the board meeting—which was originally scheduled for September 4. It was seen as crucial to determine whether CEO Oliver Blume could push through his “future plan” or if there would be a rift between the management and the board.
The unity now demonstrated was expected by very few. Volkswagen states that, in the view of its management board and supervisory board, implementing the future plan is essential to maintain the competitiveness of the Volkswagen Group and ensure its sustainability for the long term. According to insiders, the supervisory board met earlier than planned because a sort of solution emerged during the presidium meeting on Thursday.
One factor that likely helped was the possibility of delaying a decision regarding the separation of the core Volkswagen brand. “Especially Lower Saxony, which holds 20 percent of Volkswagen and has extensive veto rights under the VW Law, opposed the separation of the brand,” according to the “Handelsblatt.”
The unity between the management board and the supervisory board is likely to spark disbelief, especially among the works council. This is because the council originally thought the supervisory board was on its side—working together to resist CEO Oliver Blume’s attempt to stabilize the automaker’s finances through an even stricter cost-cutting measures.
Four Volkswagen Plants on the Brink of Closure
Background: Volkswagen CEO Blume is convinced that the company can survive only if it restructures itself completely. His plans were revealed as early as June: “Manager Magazin” reported at the time that Blume’s board was pursuing a far more radical restructuring plan than previously known, citing a board presentation titled “Group Target Picture” for 2030. This plan sets the closure of four German factories as one of its goals, with the workforce expected to shrink by 100,000 positions worldwide. “Spiegel” later investigated and found that Blume apparently intends to end production at the Zwickau and Emden factories by 2031. The Hannover plant is scheduled to follow in 2032, and the Audi factory in Neckarsulm in 2034.
In July, this “future plan” was presented to the supervisory board. However, media reports indicated that Blume failed in his attempt at an initial vote—many industry experts feared a months-long struggle would follow. As it turns out, this was unfounded. Two months later, Blume and his executives were able to convince the supervisory board. Insiders have also described the CEO as being “firmly determined” to push forward with his restructuring plan. He intends to implement the strategy “in phases now—even if it means overcoming resistance from employees and the state of Lower Saxony,” reported the “Handelsblatt” after his first failed attempt.
Important: In an interview with “Bild am Sonntag” last week, the CEO said he sees alternatives to closing factories in his long-term plan. “There are smarter solutions than shutting down plants,” Blume was quoted as saying in the report. He stated that the cost-cutting measures already implemented at German production sites are showing results: “We were able to reduce our factory costs in Germany by an average of 20 percent alone last year. That’s significant progress.” Blume did not go into further detail. However, it is possible that Volkswagen might bring in partners to the plants or repurpose them in other ways.
Among the plants at risk are Germany’s VW factories in Hannover, Zwickau, and Emden, as well as the Audi plant in Neckarsulm. This group of factories was identified as problematic back in April during a board meeting — “due to high costs,” according to a recent article in Manager Magazin. The management is said to be planning to phase out production at all four plants, with only the current model generation being manufactured there. In total, well over 40,000 men and women work at these four production sites, combining to have an annual capacity of around 750,000 cars.
Zwickau and Emden are dedicated electric vehicle production sites. The workforce in Zwickau manufactures the VW ID.3, VW ID.4, and VW ID.5, as well as the Cupra Born and the Audi Q4 e-tron. At the Emden plant, the VW ID.4, VW ID.7, and VW ID.7 Tourer are produced. In both cities, VW has already reduced the number of production lines from two to one (with two shifts each) to cut excess capacity.
The Volkswagen plant in Hannover is the headquarters of VW Nutzfahrzeuge and produces the all-electric ID. Buzz and ID. Buzz Cargo models, as well as the T-series models (Multivan). There is also a battery assembly facility on site. At the Audi plant in Neckarsulm, internal combustion engine and hybrid Audi models are currently being manufactured. Meanwhile, the Audi e-tron GT, an all-electric sports car, is also produced at the Böllinger Höfen plant. For context: The Audi plant in Brussels was closed back in February 2025.