Volkswagen Chief Executive Oliver Blume has ruled out shutting down German factories outright, telling Bild am Sonntag on 12 July that there are “smarter solutions” available to cut costs, just days after the supervisory board rejected his broader restructuring plan by 12 votes to seven. The comments appear intended to calm a workforce unsettled by weeks of leaked details about potential job losses and plant closures.

During the interview, Blume highlighted the cost reductions Volkswagen had already achieved at German sites—roughly a fifth on average during 2025—as evidence that savings are possible without resorting to closures. He told the paper: “our products are highly popular, we just aren’t making enough money from them.” However, he also declined to offer specifics on exactly what those alternative measures might be. Reports have circulated in recent months that repurposing sites for different kinds of production, and bringing in external partners, have both been floated internally as solutions. 

The board’s rejection followed weeks of speculation about an internal document known as the “Group Target Picture”, which Manager Magazin and Der Spiegel have said lays out a staged closure timeline running through the early 2030s: Zwickau and Emden first, Hanover the year after, and Audi’s Neckarsulm plant last. Together, the four sites employ around 40,000 people and account for roughly 750,000 vehicles of annual production capacity, with Zwickau and Emden dedicated to battery-electric vehicle production already scaled back from two lines to one.

Volkswagen’s works council responded with unusual bluntness, saying there has been “a massive loss of trust” in Blume and that “virtually nothing” remains of the goodwill he built up since taking charge in 2022. The council has warned of a “great fear and deep uncertainty” spreading among the automaker’s workforce and that Blume will be required to answer directly to staff at meetings scheduled after the summer break.

The urgency behind Blume’s push is visible in Volkswagen’s latest sales figures: global deliveries fell 8.6% during Q2 2026, driven by a 36.6% collapse in China, a market where VW lost the sales lead it held for 15 years to BYD in 2024. Mercedes-Benz and BMW posted their own steep Chinese declines over the same period, suggesting the pressure Volkswagen faces is structural to the German industry rather than specific to its own missteps.

That backdrop makes the board’s rejection more than a procedural setback. Herbert Diess, Blume’s predecessor, lost his job in 2022 after proposing a similar scale of job cuts, and the split supervisory board, on which labour representatives and the state of Lower Saxony hold roughly half the seats, reflects the same structural tension. The Porsche and Piech families’ holding company favours whatever protects returns, while union and state representatives are focused on preserving employment regardless of the cost to margins.

Volkswagen has explored a range of unusual solutions, including selling one or more of its plants to Chinese entrants rather than closing them outright, with Xpeng a known potential buyer. The company, a pure-play new energy vehicle brand, has described Volkswagen’s German sites as “a little bit old” and therefore potentially unsuited to its newer vehicle designs and manufacturing processes. BYD has also said it is close to striking a deal on a Stellantis site in southern Europe. 

Blume’s “smarter solutions” framing buys him time with a workforce that has grown openly distrustful, but it does not resolve the disagreement that sank his plan in the boardroom, since job cuts and plant closures were always going to be the more difficult items to negotiate, not the model lineup reductions the company has already confirmed. 

Whether alternatives such as outside partnerships or repurposed production can deliver savings anywhere near the scale Blume says are necessary for survival remains, for now, entirely unproven.