One Giant Cost-Cutting Mission
The Volkswagen Group’s profitability problems have been well documented, and the company is now taking steps to address them. Among the reported considerations are closing four German manufacturing plants, cutting up to 100,000 jobs, and reducing the model lineup across brands such as Audi and Porsche.
With so many significant changes potentially coming as Volkswagen Group seeks an operating return on sales of 8% to 10% by 2030, the company’s own supervisory board deputy chair is pushing back against the target. According to Bloomberg, Christiane Benner described it as belonging in “cloud-cuckoo-land” – essentially a fantasy detached from reality. For reference, the automaker reported an operating return on sales of 4.2% in the second quarter.
A Tougher World for VW
Benner, who also chairs Germany’s IG Metall labor union, argued that CEO Oliver Blume’s profitability targets are unrealistic under current geopolitical and business conditions. In the U.S., those pressures include import tariffs imposed by the Trump administration, which, along with weaker EV demand, likely contributed to the ID. Buzz skipping the 2026 model year. The automaker also faces tougher competition in China, where newer and more affordable domestic EVs have flooded the market.
For his part, Blume said Volkswagen’s overhead costs are more than 30% higher than those of comparable companies. He is looking to reduce annual production capacity in Europe by another 500,000 units, which could affect factories and jobs. No complete list of models on the chopping block has been released, though models that failed to meet market expectations could be included, such as the Taigo, ID.4, and ID.5.
Benner said VW’s executive board needs to provide clearer, revised cost-cutting plans before the supervisory board will approve them.
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Before Anything Gets Cut
In the U.S., Volkswagen is considering entering the pickup-truck segment, a lucrative market evidenced by the abundance of Ford F-150s and Chevrolet Silverados on the road. However, reports suggest the German marque could instead target the midsize segment, where models such as the Ford Ranger compete. No final decision has been made, but such a truck could give the company another route to U.S. growth after its EV lineup struggled to gain traction.
Whatever changes Volkswagen makes to pursue its 2030 profitability targets, Benner wants the automaker to identify which models would be affected, explain how it intends to meet its goals, and explore alternative ways to reduce costs. She also stated that labor will not accept factory closures.
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