Ekip
29 June 2026•Update: 29 June 2026
The German government aims to prevent Volkswagen from closing factories in the country, a government spokesperson said Monday, while stressing that any final decision rests with the company on commercial grounds.
The spokesperson said the government’s goal was to prevent the closure of production facilities in Germany by creating the right framework conditions, including measures to strengthen competitiveness.
“Incentives must be provided to ensure these facilities remain profitable. However, in principle, such decisions are always the responsibility of companies and must be made on commercial grounds,” the spokesperson said.
Volkswagen is reportedly considering closing four factories in Germany and expanding planned job cuts to as many as 100,000 employees as it struggles with pressure from Chinese competitors, US tariffs, and weakening demand across Europe.
The reported restructuring, which could become one of the largest in the company’s history, poses fresh risks for Germany’s sluggish economy and the federal government, which is seeking to revive growth and reverse declining public support.
The plans, which Volkswagen has not officially confirmed, are expected to face strong opposition from labor unions and the government of Lower Saxony, the automaker’s second-largest shareholder.
The German federal government does not hold a stake in Volkswagen.
A key issue in the restructuring centers on Volkswagen’s Osnabrueck plant, where the company is reportedly planning to end production in 2027 and transfer the facility to Israeli defense company Rafael to manufacture components for the Iron Dome missile defense system.
The proposal has reportedly been blocked by the Qatar Investment Authority (QIA), Volkswagen’s third-largest shareholder with 17% voting rights, because of tensions between Doha and Israel.
The federal government and the state of Lower Saxony, which holds a 20% stake in Volkswagen, support the proposed transformation, but the project also faces protests from local residents.
The reported restructuring proposals are expected to be discussed at a supervisory board meeting on July 9, which will include worker representatives.
Volkswagen management has also informed employee representatives that previously agreed job cuts would not be sufficient to meet the company’s financial targets, according to German media reports.
Reports that the company is preparing to cut around 100,000 jobs from its global workforce of 657,000 over the coming years have drawn sharp criticism from labor representatives and the IG Metall union.
In a joint statement, IG Metall and Volkswagen’s works council described the reported plans as “irresponsible threats.”
“We will use every means at our disposal to stop these attacks on employees’ rights, the Volkswagen Act, the principles of co-determination and our production facilities,” they said.
Worker representatives urged management to focus on competitive products, new technologies and job security instead of what they described as “blind activism.”
