Volkswagen's supervisory board has approved a plan to double job losses at the automaker to 100,000 and halve its model portfolio as it contends with President Trump's tariffs and intensifying competition from Chinese automakers.
In a surprise move, the company's often-fractious supervisory board unanimously approved Chief Executive Oliver Blume's radical restructuring package, called Future Plan 2030.
The company called it the "most strategically profound transformation program in the Volkswagen Group's history."
By 2035, the automaker aims to cut the number of model variants it offers by around 75%. Volkswagen also plans to reduce its workforce by 50,000 positions, including management roles, on top of roughly 50,000 already agreed to over the past two years.
"Given intensifying global competition, shifting demand and technological change in the automotive industry, a consistent alignment of workforce capacity with economic reality is essential," Volkswagen said.
The supervisory board rejected the plan at a meeting in July, triggering two months of high-profile wrangling between Blume's team, the company's powerful union representatives and its state shareholders.
A follow-up meeting was scheduled for Friday, but was brought forward to allow more time for discussion, a company spokesman said. That paved the way for the shock approval announced during the European evening Thursday.
Blume and his managers are under tremendous pressure from a rising crop of Chinese automakers that have rapidly seized market share, first in China and more recently in Volkswagen's European heartland. Meanwhile, higher tariffs have cut into profits in the U.S ., a market where mainstream success has eluded Volkswagen for decades.
With a smaller portfolio, Volkswagen aims to produce higher volumes per model with lower costs and higher-end technology.
The contentious question of plant closures was left open. The company committed to developing a competitive production plan for its European sites by the end of June 2027.
Volkswagen's European capacity currently exceeds demand by more than 500,000 units and four German plants don't currently have clear futures, the company said.
In North America, Volkswagen will focus on its most profitable segment. In China, the company is adapting to what it called revised expectations for overall growth, with a focus on exports to the Southern Hemisphere.
"This is a strong signal for the future of the Volkswagen Group," Blume said in a statement. "We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide."
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