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WOLFSBURG (July 9, 2026) – Volkswagen is weighing a massive restructuring that could slash its model lineup by as much as half and cut annual production capacity from 10 million to 9 million vehicles, as Europe’s biggest automaker struggles with high costs, overcapacity, Chinese competition, and U.S. tariffs that have cut its profit margins roughly in half since 2021.

Following a supervisory board meeting Thursday, CEO Oliver Blume said the company would focus on its most profitable market segments and slash “offering complexity” — trim levels and options — by up to 75%. “The global situation has continued to deteriorate over the past twelve months,” he said, “that is why we are acting now.”

Blume is reportedly weighing the closure of four German plants (Hanover, Emden, Zwickau, and Audi’s Neckarsulm) and cutting up to 100,000 jobs — double what’s currently planned and the largest restructuring in VW’s history. The company didn’t confirm those specifics publicly, but the speculation triggered large worker protests at VW sites Thursday, including roughly 400 demonstrators in Wolfsburg who marched with union flags behind a “strong together” banner.

Blume is caught between labor representatives on the board, who oppose deeper cuts, and the Porsche and Piëch families, VW’s controlling shareholders, who’ve watched their holdings lose tens of billions in value as VW’s stock has more than halved over three years. Works council chief Daniela Cavallo said workers aren’t responsible for the industry’s problems and that fear is spreading through VW’s factories and offices. The works council has given Blume until Friday to clarify the job-cut and plant-closure speculation, threatening further emergency staff meetings if he doesn’t. Analyst Ferdinand Dudenhoeffer noted Blume said nothing concrete about production or jobs, leaving damaging uncertainty for customers, workers, and investors alike.

Under a previous restructuring agreement, VW had committed to keeping German plants open, pushing the company to explore alternative uses for underused sites, including a defense-sector partner for its Osnabrück factory and possibly building China-market models in Germany. Data cited by Reuters shows VW’s German plants running at 81% capacity in 2026, projected to fall to 73% by 2030. Zwickau, one of the four plants reportedly at risk, is expected to see utilization drop from 88% this year to just 42% by 2030.

The turmoil comes as German Chancellor Friedrich Merz pushes competitiveness reforms while trailing in polls to the far-right Alternative for Germany party, which has used VW’s troubles to attack the government ahead of state elections in September where it could win power for the first time.