VW Group Restructuring Plan Rejected 12-7 as Unions Vote It Down

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Volkswagen Group is doing well with electric vehicle sales in its home region, but costly tariffs and eroding market share in China and North America have been hurting it badly. Europe's largest automaker, which also owns brands including Audi, Porsche, Skoda, and Lamborghini, has seen its profit margins evaporate, and yesterday the company's supervisory board was presented with a plan to ameliorate that. An expected call for factory closures and redundancies wasn't included—at least not in VW Group's public statement—but according to Reuters the measure failed anyway by a vote of 12-7.

Unlike most automakers, worker unions are extremely powerful at VW Group. Fully half of the 20 seats on the supervisory board are appointed by worker councils. Another two seats are spoken for thanks in part to the company's partial ownership by the German state of Lower Saxony—currently held by that state's minister of education and minister-president. So while profit has been important, it's not the only thing that matters to the decision-makers.

Over the years, there have been lengthy fights at any suggestion of redundancies. Lately, VW Group and its unions spent months in negotiations in 2024 before finally agreeing to a plan to cut 35,000 jobs by 2030.

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