The German government said on June 29 it wants to prevent Volkswagen from closing production sites in Germany by creating supportive conditions and incentives for profitability, but final decisions remain with Volkswagen’s management [1, 2]. A government spokesperson said, "Our aim is to prevent the closure of sites in Germany. To achieve this, the right framework conditions must be in place, including the necessary competitive mechanisms. Incentives must be provided to ensure that these sites remain profitable. In principle, however, it is always up to the companies to make these decisions on commercial grounds" [1].
Volkswagen is reportedly considering shutting down four factories in Germany and expanding planned job cuts to as many as 100,000 positions [1, 3, 4, 5, 2]. The company has informed employee representatives that previously agreed cuts are insufficient, although no final number has been confirmed [1, 3]. Volkswagen has not officially confirmed the restructuring plans [1, 2].
The German state of Lower Saxony, Volkswagen’s second-largest shareholder with about a 20% stake, is expected to strongly oppose plant closures [2]. The federal government itself holds no stake in the company [1]. The restructuring discussions could pose additional risks to Germany’s sluggish economy and complicate the federal government's efforts to stimulate growth and regain public support [1, 4, 5].
A Volkswagen supervisory board meeting is scheduled for July 9, 2026. Employee representatives will participate as the company reviews proposals including the potential factory closures and job cuts [1, 3, 4, 5, 2].
Separately, Volkswagen plans to end production at its Osnabrueck plant by 2027 and transfer the facility to Israel’s Rafael defense company to produce Iron Dome missile components. This plan faces opposition from the Qatar Investment Authority, which holds a 17% stake in Volkswagen and cites geopolitical concerns [2].
