Volkswagen is preparing the largest restructuring in its history, which includes closing 4 major factories

According to the German economics-focused newspaper WirtschaftsWoche, Volkswagen Group’s board of directors will propose closing four plants in its home country between 2031 and 2034 by the end of this week: Emden and Zwickau in 2031, Hannover in 2032, and Neckarsulm in 2034. Emden currently produces the ID.4 and ID.7, while Zwickau manufactures the ID.3, ID.4, ID.5, Audi Q4 e-tron, and CUPRA Born. Hannover assembles vans, and Neckarsulm produces the Audi A5, A6, A8, and e-tron GT.

These closures would be part of a very deep restructuring aimed at securing the company’s future. According to an internal document prepared by Boston Consulting Group and cited by WirtschaftsWoche, the operating margin (which was 2.8% in 2025) could turn negative by 2030 if no action is taken. Last year, the company’s global sales fell below 9 million cars, while the operating profit was cut in half (8.9 billion euros).

The production from the four factories would be moved to other facilities with lower costs in the Czech Republic, Slovakia, and Poland, as well as to other German plants. In theory, they could avoid closure if they drastically reduce their production costs, though the goal set by the group’s management is considered unrealistic by experts, meaning the closure of these facilities is likely inevitable.

These are not the only measures the German giant plans to take to cut costs, as it will eliminate a quarter of its management positions and reduce its global vehicle lineup by 50%. There are also plans to cut investments and R&D spending by 50 billion euros, as well as selling certain shares (could Bugatti end up being fully controlled by Rimac?).

Volkswagen plans to cut up to 100,000 jobs

Several German media outlets suggest, citing the same WirtschaftsWoche report, another possible measure: shutting down the Spanish brand SEAT. This would not mean the end of the manufacturer, which would in practice continue operating through the more profitable CUPRA brand, whose sales are currently higher than those of SEAT itself. The group’s Spanish plants (Landaben and Martorell) would not be affected by these cuts.

The new plan, which will be presented on September 4th, could be blocked by the unions and the state of Lower Saxony, which currently control 12 of the 20 seats on the board of directors. The main source of tension would be the elimination of up to 100,000 jobs in the coming years.

If the new plan is rejected, management could turn to an extraordinary shareholders’ meeting in an attempt to overcome the veto and carry out the planned cuts. In any case, various stakeholders on the board are scheduled to meet next Thursday to try to find common ground, although the voting will take place on Friday.

Source | WirtschaftsWoche