It was just eight days ago that we reported on the financial crisis at Volkswagen Group and its plan to eliminate 50,000 jobs by 2030, and how the global automaker is unloading assets to shore up the bottom line. Those asset sales have included Italdesign and its stake in Bugatti Rimac and the Rimac Group, and just yesterday VW Group announced it would reap $8.4 billion by selling 51% of industrial engine producer Everllence (formerly MAN Group’s Power Engineering business) to Bain Capital.
Italdesign ZerounoBonhams
Apparently those actions will not be enough, as reports out of Germany suggest management in Wolfsburg is actually working on even more drastic downsizing. Manager Magazin and Automotive News report today that VW CEO Oliver Blume aims to cut up to 100,000 jobs, in addition to ending production at German plants in Hanover, Zwickau, Emden, and Neckarsulmm, which manufactures the Audi A5, A6, and A8. That’s a very big number, but is there teeth to this report?
EV Plants In Germany Hit Hardest
VW ID.7 Tourer Pro built at Emden, Germany, plant Aug 2025Volkswagen
If all that isn’t enough of a gut punch to German pride and to labor union members, Manager Magazin also says the group’s struggling VW
brand and parts-manufacturing plants would be spun off as separate entities. As for the plants slated for closure, the magazine reported that production would halt once the models manufactured at the four plants are phased out.
Expect more details on VW Group’s restructuring when Blume presents his plans to the supervisory board on July 9. VW Group employs more than 650,000 people worldwide, including 280,000 employees in Germany.
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Beyond Neckarsulm, the plant closures are directly tied to lagging sales of battery-electric vehicles. The Hanover plant produces the ID. Buzz, ID. Buzz Cargo, and the Multivan (available in plug-in hybrid and traditional drive); Emden manufactures the ID.4 SUV and ID.7 sedan and Tourer estate; while Zwickau builds VW ID.3, ID.4, and ID.5, Audi Q4 e-tron and Q4 Sportback e-tron, and the Cupra Born EV. Helping labor unions in their fight to keep the plants open is a 2024 deal with unions guaranteeing no plant closures this decade.
‘Ripple Effect Hit Home’
VW’s restructuring will potentially alter the automotive landscape in Europe if the automaker proceeds with outsourcing more component manufacturing to suppliers and spinning off the VW brand, Conrad Layson, senior analyst for alternative propulsion at AutoForecast Solutions, told CarBuzz today. He says much of the automaker’s current troubles are tied directly to vehicle sales slowing in China.
“When the Chinese market collapsed for Volkswagen China, the ripple effect hit home rather quickly. One-third of the corporation’s income is gone. It has not been replaced.”
–Conrad Layson, AutoForecast Solutions Senior Analyst
CarBuzz Insight – Why This Matters:
The world’s No. 2 automaker behind Toyota based on sales volume, VW Group has found itself in a perfect storm that has been treacherous to navigate. Like General Motors, VW pivoted heavily toward battery-electric vehicles, committing to invest $136 billion to develop and manufacture EVs, but that market has cooled, particularly in the US. Beyond EVs, tariffs have made the US market even more challenging for VW, with hopes that the new 2027 Atlas will help turn the tide when it launches this fall.
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The Chinese market had been highly lucrative for VW for more than 20 years. With so much turmoil in VW’s home market, is there much of a future for the VW brand in the US, or will Audi and Porsche become the group’s standard bearers here? Will there be enough money to complete the South Carolina plant intended to launch the Scout pickup and SUV? These are tough questions, and some of the answers might surface on July 9.
Source: Automotive News
