- Volkswagen’s Supervisory Board has approved the most dramatic revamp in its history.
- Automaker will focus on core models and eliminate roughly half the current lineup.
- Four plants are on the chopping block and 50,000 people could lose their jobs.
After months of rumor and speculation, Volkswagen’s Supervisory Board has unanimously approved a comprehensive revamp of the struggling automaker. Known as Future Plan 2030, it’s being described as the “most strategically profound transformation program in the Volkswagen Group’s history.”
It calls for steep cuts and plant closures as the company will only focus on its “most compelling vehicles.” By 2035, roughly 50% of the current lineup will be dead. The automaker will also reduce complexity by around 75 percent, so surviving models will likely offer a simplified lineup with fewer variants.
More: VW’s Leaked Restructuring Plan Targets 4 Plants And Tens Of Thousands Of German Jobs
Volkswagen says this will result in “higher volumes per model, lower costs, [and] stronger economies of scale.” The company added they’re “systematically tailoring its platforms, electronic architectures, driver assistance systems, and software to the needs of both the Western and Eastern hemispheres.”
Job Cuts And Possible Plant Closures
Unfortunately, Volkswagen said their European production capacity is more than 500,000 units too much and they’ll need to make adjustments. The company wants to have a plan in place by the end of June 2027, but warned “competitive future production allocation for the Emden, Zwickau, Hanover and Neckarsulm plants cannot currently be secured on a staggered basis from 2031 to 2034.” The company added that “alternative uses for these plants are being assessed.”
The plants build an assortment of different models including the Audi A5, A6, A8, e-tron GT, and Q4 e-tron / Q4 Sportback e-tron. They also make the Cupra Born as well as the Volkswagen ID.3, ID.4, ID.5, ID.7 / ID.7 Tourer, and ID. Buzz.
On the people side of the equation, Volkswagen said a “consistent alignment of workforce capacity with economic reality is essential.” That’s a nice way of saying the company wants to axe approximately 50,000 employees including some in management roles.
The Volkswagen Group is also putting its various businesses and shareholdings under the microscope. As part of this process, about a third of the company’s “non-strategic activities” will be “divested or realigned” as they’re focusing on firms that deliver a “clear strategic and financial contribution to the core business.” The automaker is also reviewing their real estate portfolio and may sell off some holdings.
Future Outlook
While the cuts are steep, Volkswagen said they’re aiming to hit group sales of nine million units annually. The automaker is also working to establish “leaner leadership structures, clear accountability, and shorter lines of decision making [that will] empower teams to act faster and take greater ownership.”
In the end, this promises to make brands stronger, more competitive and better positioned for the future. Furthermore, Volkswagen said their North American activities will “focus on the most profitable segments.” This could ultimately spell the end of the Jetta, if earlier reports are correct.
Volkswagen Group CEO Oliver Blume remarked, “The Supervisory Board has unanimously approved the Executive Board’s Future Plan presented today. This is a strong signal for the future of the Volkswagen Group. We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide. Over the coming years, we will invest a three-figure billion sum to make our iconic brands even more attractive, stronger and more competitive.”
