Sometimes you have to wonder if top-ranking automotive executives who are on the hot seat to make gut-wrenching decisions are naturally born with leather skin or ice water in their veins. It’s understandable to ask that question about Oliver Blume, the embattled CEO of Volkswagen Group, which appears to be in freefall mode as the company considers plant closures, at least 50,000 job cuts, and the discontinuation of slow-selling nameplates.
That’s across the entire multinational Volkswagen empire, which Blume oversees, with its 650,000 employees worldwide and about half of those within the home market of Germany. But the problems extend well beyond the corporate umbrella to include three brands known all over the world, and now their financial difficulties are falling under intense public scrutiny as well: Porsche, Audi, and Volkswagen.
While Blume contemplates the big picture, his lieutenants running the individual brands are perhaps feeling equal stress to save these iconic, long-standing companies from the brink of disaster. And his big picture of massive cuts has faced considerable backlash at every turn, and it’s only getting worse. Either way you slice it, Blume is going to take it on the chin from somewhere. Some might say it’s already begun.
Blame It All On Dieselgate?
A silver Volkswagen Golf moves through the Wolfsburg assembly line.Volkswagen
CarBuzz has reported extensively this year on board meetings, financial statements, and investor days where Blume has repeatedly sounded the alarm that VW Group and its brands cannot survive the future without achieving steady profitability. Perhaps the situation would be less dire if Volkswagen hadn’t paid $34 billion globally in criminal fines, civil penalties, vehicle buybacks, and environmental mitigation efforts as penance for the embarrassing diesel emissions cheating scandal that erupted 11 years ago next month.
On Friday, September 4, the next saga of the latest crisis unfolds as the Volkswagen Supervisory Board meets to consider major restructuring plans proposed by Blume, and widely opposed by workers, labor unions, and government stakeholders. Notable among that group is the state government of Lower Saxony, which is VW’s second-largest voting shareholder and home to VW headquarters in Wolfsburg. Blume presented his plans to the board in July, but he failed to win support.
This week, Reuters reports that Blume has begun a tour of VW assembly plants in Germany, starting out in Wolfsburg by addressing more than 10,000 workers, many of them booing and carrying banners saying, “Our jobs are not your balance sheet adjustments.” That’s definitely not a good sign of things to come.
But Reuters reports that Blume stayed on message. Rather than saying what workers wanted to hear, he repeated the need for far-reaching cuts and possible plant closures, as supported by the VW Group’s owner families, in response to plummeting vehicle sales in China and, to a lesser extent, in the US.
“Our plan for the future is the largest transformation program in our company’s history. To make this happen, everyone needs to pull together now.”
–VW Group CEO Oliver Blume
Blume contends VW has too many plants, as the automaker had been building capacity to assemble as many as 12 million cars a year, in a much different market. The company has already eliminated two million units of capacity but still has further to go in realigning for nine million vehicles a year. Earlier media reports identified German plants in Hanover, Zwickau, Emden, and Neckarsulm as on the bubble.
Closing Plants Means Cutting Nameplates
Volkswagen Plant In Wolfsburg, GermanyVolkswagen
If those plants close, it raises questions about the future of those models built there: Audi A5, A6, and A8 at Neckarsulm; VW ID. Buzz, ID. Buzz Cargo, and the Multivan in Hanover; ID.4 SUV and ID.7 sedan and Tourer estate at Emden; and the VW ID.3, ID.4, and ID.5, Audi Q4 e-tron and Q4 Sportback e-tron at Zwickau. Helping labor unions in their fight to keep the plants open is a 2024 deal with unions guaranteeing no plant closures this decade.
But make no mistake – labor unions are still very much fighting against Blume.
“Our trust in this company’s executive board, and especially in its CEO Oliver Blume, has been damaged,” said VW labor leader Daniela Cavallo, per Reuters. “Not yet beyond repair, but damaged nonetheless.”
Porsche Electrification Strategy BlumePorsche
In a recent statement, IG Metall union representative Thorsten Groger offered stronger words that point to a massive showdown with Blume if his proposed cuts come to fruition.
“Cooperation is possible,” he said, “but if VW management chooses only to pursue a path of layoffs and cutbacks, we will oppose it with all our might.”
CarBuzz Insight – Why This Matters:
It’s a perfect storm that’s hitting Volkswagen Group right now, with sagging fortunes in the China market, economic uncertainty in the face of war in Iran, and the European market facing increasing competition from low-priced Chinese cars. US tariffs have made it even more difficult to make money in the US market, which remains a top priority across the VW Group.
2025 Volkswagen ID. Buzz Candy White/Pomelo Yellow Rear AngleVolkswagen
At the upcoming supervisory board meeting, we’ll find out if Blume made any progress on his manufacturing plant tours, and expect labor representatives and major shareholder Lower Saxony to present alternative plans to restructure VW. If you need a glass-half-full perspective, other media reports have suggested downsizing could impact 100,000 employees, but Blume stressed 50,000 cuts to bring costs in line.
Source: Reuters
