The Long Unwinding

Volkswagen's restructuring, 2024 to 2026: what has actually happened, what is credibly reported, and what has been invented along the way.

Rob Curtis · Fact-checked against contemporary reporting · Status as at 9 July 2026

Few corporate stories of the past two years have attracted as much confident misremembering as Volkswagen's restructuring. Depending on who is talking, the plants closed years ago, or nothing has happened at all, or the whole affair is the visible edge of some grander geopolitical design. The record is in fact unusually well documented, and it rewards being read in order. What emerges is neither a sudden collapse nor a long-accomplished fact, but a slow, contested unwinding that began with a threat in the autumn of 2024, was partly negotiated away that Christmas, gathered real casualties through 2025, and returned in the summer of 2026 in a far larger form. As of today, the ninth of July 2026, the largest proposals in the company's history sit in front of its supervisory board, still undecided.

The rupture of 2024

In September and October 2024, Volkswagen management did something it had never done in the company's history: it put the closure of German plants on the table. The stated logic was cost. Volkswagen brand chief Thomas Schäfer told the workforce that factory costs in Germany were running 25 to 50 per cent above plan, making the German plants roughly twice as expensive as those of competitors. The announcement triggered warning strikes, furious works council meetings and months of negotiation with IG Metall, the union whose position inside Volkswagen's co-determination structure gives it real power over exactly this kind of decision.

The negotiation concluded just before Christmas 2024 with the agreement known as Zukunft Volkswagen. Its terms matter, because they are the reason it is wrong to say plants closed in 2024, and equally wrong to say nothing happened. The deal took German plant closures off the table and barred forced redundancies through the end of 2030. In exchange, the company won an agreed reduction of around 35,000 German jobs by 2030, achieved through attrition and voluntary departure schemes, and a lasting cut in German production capacity of 734,000 vehicles a year. Parallel programmes at Audi, Porsche and the CARIAD software unit took the group-wide reduction target to roughly 50,000 positions.

The deal also redrew the production map. Golf assembly, resident in Wolfsburg for fifty years, was assigned to the group's plant in Puebla, Mexico from 2027, with Wolfsburg consolidating from four assembly lines to two and taking on the ID.3 and Cupra Born, ahead of an electric Golf at the end of the decade. Poland was genuinely in the frame during the deliberations: a plant in Poznań was examined as an alternative destination, and overflow Golf production there had already been planned, with both Mexico and Poland judged cheaper than Germany. Mexico is what was agreed. Production at Dresden's Transparent Factory was set to end in late 2025, and Osnabrück was given the T-Roc Cabrio only until mid-2027, with alternative uses to be examined for both sites.

What has actually closed

The first true closure in this story happened not in Germany but in Belgium. On 28 February 2025, Audi's plant in the Brussels district of Forest built its last car and shut, ending production of the Q8 e-tron and eliminating around 3,000 jobs. The site was the largest private employer in the Belgian capital. Audi had spent months seeking a buyer, and rumours of interest from China's Nio came to nothing; its production head called the closure the hardest decision of his career. The causes cited were weak demand for large premium electric vehicles and long-standing structural costs at the site. Belgium's defence minister has since floated converting the plant to weapons production, a point worth holding onto for later.

China followed. In mid-2025, Volkswagen confirmed that the SAIC Volkswagen joint venture's Nanjing plant had ended production, with Passat assembly moved to another site in Jiangsu province and other Chinese sites being converted to electric vehicle production. In Germany itself, Dresden's Transparent Factory ceased vehicle production at the end of 2025 as agreed, and Osnabrück continues its scheduled wind-down. The headcount reduction, meanwhile, is well advanced: by Volkswagen's annual general meeting in June 2026, departure agreements covering more than 28,000 employees across Volkswagen, Audi, Porsche and CARIAD had been signed.

So by the summer of 2026 the honest summary was this: one European plant closed, one Chinese plant closed, one German boutique factory wound down, tens of thousands of exits agreed, and not one of the big German assembly plants shut.

The financial collapse of 2025

The numbers explain why the story did not end there. Volkswagen's full-year 2025 results, reported in March 2026, showed operating profit falling 53 per cent to €8.9 billion from €19.1 billion the year before, with the operating margin dropping to 2.8 per cent from 5.9 per cent. Net profit fell 44 per cent to about €6.9 billion, one of the weakest results since the diesel scandal. The dividend was cut by roughly 17 per cent.

The composition of the damage is instructive. Revenue barely moved, slipping to €321.9 billion from €324.7 billion, on essentially unchanged deliveries of about nine million vehicles. This is, in other words, a margin crisis rather than a demand collapse: the company still sells the cars, it just makes very little on them. Porsche, long the group's profit engine, saw operating profit fall 98 per cent to €90 million, a margin of 0.3 per cent against 14.5 per cent in 2024, dragged down by a €4.7 billion impairment tied to slowing its electrification strategy and by American tariffs, which fall on Porsche with full force because it exports every car it sells in the United States. US tariffs cost the group well over a billion euros in 2025, and finance chief Arno Antlitz has put their annualised burden at roughly €4 billion. Regionally, Europe grew 5 per cent and South America 12, but North America fell 12 per cent and China 6, with first-quarter 2026 Chinese sales down a further 20 per cent as BYD and other domestic makers continued to take share.

There is a legitimate argument, made by shareholders themselves, about what the cuts can and cannot fix. When the latest plans surfaced, Ingo Speich of Deka told Reuters that the high costs were a symptom rather than the cause, the root cause being weak sales. Closing capacity lowers the cost base, but it also removes future revenue: a smaller Volkswagen earning better margins is the plan, and the bet is that shrinking to profitability beats subsidising underused factories. The first quarter of 2026, with net profit down 28 per cent and shares at sixteen-year lows, suggested markets were not yet convinced.

The escalation of 2026

On 26 June 2026, Reuters reported that Volkswagen was considering shutting four German factories and raising total job cuts to as many as 100,000, which would be the largest restructuring in automotive industry history. The sites named were the Volkswagen plants at Hanover, Zwickau and Emden and Audi's Neckarsulm factory, together employing more than 45,000 people; the additional cuts would come on top of the roughly 50,000 already agreed. Accompanying reporting, led by Manager Magazin, described a plan to cut planned investment by about 15 per cent to just over €130 billion across five years, and a fundamental reorganisation that could spin off the core Volkswagen brand and the components division into separate entities, easier to list on capital markets. The group's stated ambition is to restore operating margins to 8 to 10 per cent by 2030, with annual savings targets in the region of €6 billion or more by the end of the decade, figures that vary slightly between reports.

Volkswagen has confirmed none of the specifics. Its spokesperson said only that the entire group must undergo far-reaching change, and declined to comment on what it called confidential documents. IG Metall and the General Works Council responded jointly that they would do everything in their power to prevent such plans, and the union organised protests outside plants across the country for today, 9 July, when management presents the proposals to the supervisory board. Nobody close to the process expects a decision today; the more likely outcome is months of negotiation among management, unions and politicians.

The structural obstacles are formidable and specific. The state of Lower Saxony holds a stake large enough to block key decisions, and six of the group's factories sit in that state. The supervisory board splits evenly between shareholder and employee representatives, and labour currently holds an effective majority following a recent resignation on the shareholder side. The 2024 agreement barring closures and forced redundancies through 2030 still stands and would have to be renegotiated or overridden. Softer variants are already circulating: shifting China-focused models to underused sites such as Zwickau, starving certain plants of new models so production ends gradually rather than by decree, and handing idle factories to defence manufacturers looking to expand, an idea already aired for Brussels and now for the German sites.

The ledger

Given how much confident nonsense circulates about this story, it is worth stating plainly which claims sit in which category.

Timeline

Date	Event
Sep–Oct 2024	Volkswagen threatens German plant closures for the first time in its history; German factory costs stated at 25–50% above plan
Dec 2024	Zukunft Volkswagen deal: no closures, no forced redundancies to 2030; 35,000 German jobs cut by 2030; capacity down 734,000 units; Golf to Puebla from 2027
28 Feb 2025	Audi Brussels closes; c. 3,000 jobs lost; Q8 e-tron discontinued; no buyer found
Mid 2025	SAIC Volkswagen Nanjing plant ends production; Passat assembly relocated within Jiangsu
Late 2025	Vehicle production ends at Dresden's Transparent Factory as agreed
Mar 2026	FY2025 results: operating profit down 53% to €8.9bn; Porsche margin 0.3%; dividend cut c. 17%
Jun 2026	AGM confirms 28,000+ departure agreements signed; Reuters reports four-plant closure plan and up to 100,000 cuts; shares hit 16-year lows
9 Jul 2026	Supervisory board discusses the proposals; IG Metall protests at plants nationwide; no decision expected; negotiations begin

What comes next

The safest forecast is the unheroic one. The pressures are real and worsening, and the company itself has said its business model in its current form is unsustainable, so deeper cuts of some kind will almost certainly proceed. But the specific maximal version now in the headlines, four closures and 100,000 gone, has to pass through a labour-majority supervisory board, a state government with a blocking stake, a standing agreement that forbids exactly these measures until 2030, and a union that has already put people on the street. The likeliest outcome, on the record so far, is a negotiated middle: some sites repurposed or run down by attrition rather than padlocked, a headline number somewhere between what labour conceded in 2024 and what management floated in 2026, and a settlement that takes months to reach. Anyone claiming today that the matter is settled, in either direction, is ahead of the facts. The record is precise enough that nobody needs to be. ■