Abstract:
The Volkswagen Group Supervisory Board unanimously approved the "2030 Future Plan" submitted by the board of directors on Thursday (September 3). According to the plan, on the basis of the adjustment of approximately 50,000 positions since the end of 2024, the group will reduce another approximately 50,000 positions globally, including some management positions. By around 2030, Volkswagen's cumulative job reductions are expected to reach about 100,000, equivalent to about 15% of the group's total global employees.
Volkswagen said that competition in the global automobile market is intensifying and the consumer demand structure continues to change. At the same time, electrification, softwareization and intelligent transformation continue to push up R&D and investment pressure. The company needs to further adjust its personnel and cost structure to match the organizational scale with the new market environment.
At the same time, the Supervisory Board also appointed Erica Lasch as Human Resources Director of Volkswagen AG from October 1.
More than 28,000 people have accepted the separation package, and the new round of adjustments has expanded to the world
At the end of 2024, the Volkswagen Group has reached an arrangement with the labor union on the adjustment of about 50,000 positions in Germany's Volkswagen brand, Audi, Porsche and software subsidiary CARIAD, mainly through voluntary resignation, early retirement and other methods to reduce the social impact of forced layoffs. Currently, more than 28,000 employees have accepted relevant severance packages.
This time around 50,000 additional positions have been added and the adjustment has been expanded to a global scale. The company said the scale was based on a re-evaluation of costs for management, infrastructure and support functions, with the goal of bringing costs closer to those of comparable competitors.
Oliver Blume, CEO of Volkswagen Group, said that the supervisory board unanimously approved the plan, sending a clear signal that the group is advancing its transformation. In the next few years, the company still plans to invest three billion euros in new products, technologies and brand competitiveness.
Supervisory Board Chairman Hans-Dieter Perch said that the core goal of the plan is to control costs while ensuring Volkswagen's long-term competitiveness and continued operating capabilities. Olaf Liss, Governor of Lower Saxony and member of the Supervisory Board, also said that this resolution not only involves personnel and cost adjustments, but also includes plans for future investment and long-term arrangements for German factories.
The four German factories have no clear follow-up models after 2031
In this plan, the adjustment of German local production capacity has become the focus.
Volkswagen confirmed that the four factories of Emden, Zwickau, Hannover and Audi Neckarsulm are currently unable to guarantee competitive follow-up models or production tasks between 2031 and 2034. The Group is simultaneously evaluating other potential uses for these plants.
The company also pointed out that the European automobile market currently has structural excess production capacity of more than 500,000 vehicles. Against this background, Volkswagen plans to further shrink its product portfolio and focus its resources on more attractive and profitable market segments. According to the plan, the number of the group's models may be cut by up to half, and product complexity reduced by up to 75%.
For the four German factories, the core issue in the next few years will be whether they can obtain new models or business arrangements. If the complete vehicle factory is eventually closed, it will be the first time in Volkswagen's history that a complete vehicle production base has been shut down in Germany.
The operating return on sales target is 8% to 10% by 2030
In addition to personnel and production capacity adjustments, another core goal of the "2030 Future Plan" is to improve the group's profitability.
The medium-term goal set by Volkswagen is to increase the group's operating return on sales to 8% to 10% by 2030. The company hopes to improve its current high cost base by cutting fixed costs, compressing the number of models, reducing product complexity and improving organizational efficiency.
There are reports that the costs related to this round of overall restructuring may reach approximately 10 billion euros. At the same time, Volkswagen still emphasizes that it will not rely solely on cost cutting to complete the transformation. In the next few years, it will still make large-scale capital investment for electric vehicles, software platforms and core brand upgrades.
Previously, management once considered accelerating the restructuring plan by convening a special shareholders' meeting, etc. However, as the supervisory board unanimously approved the plan, this option was temporarily shelved, which also reduced the risk of head-on conflict with the union and Volkswagen's second largest shareholder Lower Saxony. The union has previously made it clear that if the company forcibly closes its German factories, it will take steps to block related plans.
At present, Volkswagen has not announced the specific distribution of the approximately 50,000 new jobs among various brands and regions, nor has it given a detailed timetable for the alternative uses of the four German factories and the reduction of vehicle models. The execution progress in the next few years will directly affect the group's ability to adjust its staff size, production capacity and product structure to a more competitive level while maintaining its investment capabilities.
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