One of the most potentially explosive elements of VW’s reported plan is the possible spin-off of at least parts of the company into a separate entity. Experts say management may be seeking to create a corporate structure that would give it greater freedom to decide the future of factories and jobs, without the constraints of state ownership or trade union representation. Under the current law regulating VW’s governance model, management would need a two-thirds supervisory board majority to close one of its western German factories.
“It would be very radical,” Helena Wisbert, professor of automotive economics at Ostfalia University of Applied Sciences, said of a possible spinoff attempt. Wisbert said such a step would be extremely difficult to pull off — in great part because the current supervisory board would have to approve a spinoff. Still, she added, if such a step were truly under consideration, “it would really show just how intense the pressure to cut costs is right now.”
In an emailed statement to POLITICO sent on Friday, VW said it would “not comment on internal, confidential documents,” but added that “the entire Group — including its brands and subsidiaries — must undergo a profound transformation. To this end, the Group Executive Board has been working intensively over the past few months on a strategic plan for the company’s restructuring.”
VW’s woes became clear in 2024, when management announced a plan to close three factories in Germany for the first time in the automaker’s then 87-year history. But after marathon negotiations at the end of that year — which labor unions hailed as a “Christmas miracle” — factory closures were averted. Both parties agreed that 35,000 jobs would be cut by 2030.
But as the company’s outlook soured, VW announced this March it would increase job cuts to 50,000 by 2030 — an announcement met with relatively muted reaction. Now, plans to cut double that amount are facing far stiffer resistance.
“As a state, we have a clear expectation that VW management will put forward a viable plan for the future,” Grant Hendrik Tonne, the SPD economy minster of the state of Lower Saxony, told POLITICO. “Plant closures are not a plan for the future and are therefore unacceptable.”
Romanus Otte contributed reporting.