Volkswagen CEO Oliver Blume Warns Cost-Cutting Drive Is Far From Over.
✧ GENERATE BRIEFING +
Volkswagen CEO Oliver Blume has issued a direct warning to employees that the German automaker's cost-cutting drive is far from complete, as management struggles to close a severe cost gap against European competitors. Addressing workers at the Emden electric vehicle plant in Lower Saxony, Blume cautioned that high domestic production costs leave German facilities at a severe competitive disadvantage. The warnings come as Blume tours Volkswagen’s primary German manufacturing hubs to secure backing for a major restructuring plan ahead of a critical Supervisory Board meeting on September 4, 2026. With up to 50,000 potential job cuts under consideration across the group, labor representatives and the state of Lower Saxony are signaling strong opposition to forced redundancies and plant closures.
Volkswagen Group Chief Executive Officer Oliver Blume told staff at the company’s Emden EV plant in Lower Saxony that the automaker’s cost-reduction journey “is far from over”. The warning comes as Europe’s largest carmaker attempts to restore cost competitiveness amid sluggish EV adoption, rising Chinese competition, and high domestic overheads.
Speaking at a site assembly, Blume emphasized that German labor costs at the Emden plant are more than double those of comparable European EV manufacturing sites, while general factory operating expenses remain significantly higher.
Plants Lacking Post-2030 Allocations
Emden—which produces Volkswagen’s ID.3 and ID.4 electric lineups—is one of four key German facilities that currently lack an allocated manufacturing product plan beyond 2030. The other three at-risk sites are:
- Zwickau: Volkswagen’s primary EV production hub in Saxony, which has faced reduced shift capacity due to sluggish demand across Western Europe.
- Neckarsulm: Audi’s primary high-performance and executive vehicle manufacturing hub.
- Hanover: Home to Volkswagen Commercial Vehicles and specialized assembly lines.
Blume reiterated that while factory closures remain a “last resort,” Volkswagen will evaluate alternative industrial options—including strategic partnerships, third-party investors, or repurposing facilities for alternative manufacturing.
Workforce Resistance and Governance Friction
Blume’s roadshow across German plants has met stiff resistance from employee works councils and labor unions. Works Council Chair Daniela Cavallo criticized management for causing uncertainty among workers, demanding clear guarantees against compulsory layoffs and plant shut-downs.
The final approval for any comprehensive restructuring plan rests with Volkswagen’s 20-member Supervisory Board, which meets on September 4, 2026. Half of the board seats are held by labor representatives, while the State of Lower Saxony—which owns a 20% voting stake—holds two seats, creating a formidable barrier to unconsented site closures or forced redundancies.
