Germany’s largest union, IG Metall, warned on 1 September of “maximum resistance” if Volkswagen should in any way try to unwind its existing restructuring agreement, ahead of a decisive supervisory board vote scheduled for 4 September. Thorsten Gröger, the union’s regional leader in Lower Saxony, told workers in Hanover that “if the board tries to call this agreement into question again, then the factory floors will be up in arms at all our sites”. 

The dispute concerns what is widely expected to become Volkswagen’s largest-ever restructuring by far, potentially including the closure of up to four plants, the carving out of entire divisions, and as many as 140,000 job cuts—far beyond the 50,000 originally agreed with the union. It comes less than two years after the most recent restructuring package, the one the union wants Volkswagen to stick to, was settled in December 2024. It was also the subject of extensive controversy, and led to limited strike action from the union. 

Chief Financial Officer Arno Antlitz, speaking at the same Hanover meeting, said that  Volkswagen would do everything possible to safeguard jobs. At the same time, he cautioned that no viable production plan has yet emerged for the four plants under discussion for closure—Hanover, Emden, Zwickau and Audi-operated Neckarsulm. Continuing production there without cutting excess capacity would leave the group with a permanent cost disadvantage of roughly €1.5bn (US$1.74bn) a year. 

The four sites face meaningfully different problems rather than one uniform capacity issue. Hanover supports a large commercial-vehicle business; Emden and Zwickau are tied closely to electric vehicle (EV) production; Neckarsulm is an Audi site, meaning product allocation and investment are handled differently, and take comparable weight to discussions about headcount.

Volkswagen’s governance structure, which is distinctly progressive and worker-oriented as automakers go, has repeatedly constrained management’s ability to act unilaterally on restructuring. Employee representatives hold half of the supervisory board’s 20 seats and Lower Saxony’s 20% shareholding can influence decisions requiring a qualified majority. However, that balance shifts entirely at a general shareholder meeting: unions have no vote at all and the Porsche and Piëch families’ 53.3% stake, combined with Qatar’s 17% and other shareholders’ 9.7%, could reach the 75% supermajority typically required for major structural changes at a German company.

Reuters has indicated that this may, in fact, occur: management could call an extraordinary shareholder meeting, potentially in October, if the 5 September board vote rejects the restructuring plan. This route would bypass the union and Lower Saxony’s effective veto on the supervisory board entirely, allowing the vote to likely pass, but would be equally likely to trigger substantial blowback from workers, including strikes. Lower Saxony Premier Olaf Lies urged all sides to reach a compromise before the vote, saying Volkswagen “bears an enormous responsibility for the wider economy and society” given its scale of employment across the state.

The financial backdrop explains why management is pushing so hard. Madox Square managing partner Paul Bennett has forecast that Volkswagen’s China joint-venture profit is forecast to fall from near €1bn (US$1.2bn) to as little as €200m (US$230m) within a single year, with deliveries down more than a third in one quarter. The group’s overall first-half operating margin came in at just 3.8%, on revenue of €158.1bn (US$183bn); 

Volkswagen has pledged to increase its margins to around 9% through cost cutting; such margins, management argues, are necessary to invest in the future technologies and manufacturing that will safeguard its future business. IG Metall Chief Christian Brenner has dismissed this ambition, calling it “cloud cuckoo land”. Other automakers, including Hyundai, are now targeting similar margins. 

Whichever way the 4 September vote goes, the fact that Volkswagen’s own executives are potentially weighing an extraordinary shareholder meeting—a mechanism that would sideline the exact governance protections labour has relied on for decades—shows how much the underlying financial pressure has already changed what management considers politically possible.