The Volkswagen Group’s supervisory board has blocked an initial effort from company bosses to push through a chopping board of job losses and budget cuts.

VW CEO Oliver Blume presented a 12-point plan detailing initiatives to shore up the company, but a statement following Thursday’s board meeting made no mention of the job or budget cuts. 

Previously reported measures include 100,000 job cuts that would make the restructuring the largest ever attempted in corporate history, as well as the closure of four factories. 

The statement confirmed that Blume plans to reduce the Volkswagen Group’s vehicle production from 12 million to nine million, as well as reducing the model range across the whole group by half. 

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The release said that the company will focus only on “the most attractive market segments” and that within model lineups the number of trims and options will be cut down massively, leaving consumers with less choice but Volkswagen with reduced complexity on the production line. 

German law mandates the presence of unions and local politicians on the company’s supervisory board, as well as a two-thirds majority for big decisions like closing key plants, though it appears that two of the four factories under threat don’t need supervisory board approval for closing down.

It’s not clear at this point which of the proposed cuts Blume is able to press ahead with, but the job losses and plant closures are likely going to involve months of negotiations with the trade unions. 

Blume’s statement after the meeting was upbeat, saying that the decisions were necessary to meet the company’s 2030 goals of offering “inspiring products” and “robust financial results”. He did refer obliquely to “reduction of overcapacities”, which suggests that the question of factory closures will be revisited. 

It was left to finance boss Arno Antlitz to be the bad guy: “Despite the progress achieved, the cost reductions planned to date under the agreed programs are not sufficient in the current economic and geopolitical environment,” he said. “We must instead fundamentally realign our business model and achieve structural, sustainable improvements.”

The company has suffered in the last year or so from a perfect storm of trade tariffs, geopolitical tensions, a drop in the Chinese new car market and intense competition from Chinese carmakers in other markets. 

While specific details of the 12-point plan have not been made available, nothing appears to be off the table in terms of cutting costs or selling off brands to raise cash and cut down on corporate flab.

Factories like this facility in Zwickau near the Czech border are under threat – and it has been building EVs since 2019