Volkswagen faces major backlash over plans to shut factories and cut 100,000 jobs

Volkswagen, one of the most popular car companies in the world, is planning to cut its model lineup, reduce capacity and potentially slash 100,000 jobs in the largest restructuring in the history of the company.

The German automaker plans to make drastic changes to its operational output as it battles against hefty tariffs and competition from Chinese manufacturers.

Volkswagen has seen its profit margins halve between 2021 and 2025, prompting a supervisory board meeting to consider measures to guarantee the future of the company.

It announced that its lineup would eventually be cut by up to half, in addition to reducing production capacity to nine million vehicles per year, down from 10 million.

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Volkswagen CEO Oliver Blume said: "The global situation has continued to deteriorate over the past 12 months. That is why we are acting now."

Reports have indicated that Volkswagen could introduce measures that would result in the loss of 100,000 jobs across the company.

The CEO is reportedly considering closing four German plants, including in Hanover, Emden, Zwickau and Audi's Neckarsulm plant, although this has not yet been confirmed.

Plans to make significant changes to the company's structure have been met with backlash from workers and unions.

Employees protested outside of various Volkswagen factories and offices around Germany with signs, whistles and banners.

Some of the messages included "strong together", and "we're fighting for every job" as union members took aim at the iconic German manufacturer.

IG Metall, which is one of the largest unions in Germany, claimed that 400 people were demonstrating in Wolfsburg.

Daniela Cavallo, the head of Volkswagen's works council, said that the blame for the company's issues should not fall on the workers.

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She added that "great fear and deep uncertainty" had been spreading across the business at factories and offices, which was having a further negative impact on workers.

Reuters has reported that the works council has called on Mr Blume to address speculation around the proposed measures, especially regarding potential job cuts and plant closures.

Ferdinand Dudenhoeffer, German automotive industry analyst, said: "Not a word about production, not a word about employment.

"One could also say that uncertainty remains – which is not good for customers, employees and investors."

The Volkswagen Group remains the best-selling manufacturer in Europe, with a market share of 25.8 per cent, of which 10.1 per cent belongs to Volkswagen.

It has sold more than 1.5 million vehicles in the European Union, European Free Trade Association and the UK between January and the end of May this year.

Volkswagen has almost double the market share of any other manufacturer, although sales have fallen by four per cent year-on-year.

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