Volkswagen Board Majority Signals Existential Danger as German Auto Job Losses Mount
17.06.2026 - 14:45:30 | boerse-global.de
An internal survey of Volkswagen’s management board has revealed that six out of nine members consider the company’s current situation to be existentially threatening. The findings, reported by Manager Magazin, show unanimous demand among all board executives for a radical strategic overhaul, particularly in China and North America. The dramatic assessment comes as Germany’s automotive industry accelerates a wave of job cuts that already eliminated roughly 49,000 positions in 2025 alone.
The pressure on VW will be on full display at its annual general meeting on June 18, where critical shareholders are pushing back against a planned dividend of around €2.6 billion. They argue the payout is too high given that group profit tumbled 44% in 2025 to €6.9 billion.
One of the most tangible consequences of Volkswagen’s struggles is emerging at its Osnabrück plant. Production of the T-Roc Cabrio is being scaled back; the factory’s usual August shutdown will be extended by one week, followed by a four-day work week. With work at the site visibly running out, management is exploring alternatives for the roughly 2,300 employees. A decision is expected by year-end, and one option under serious consideration involves handing the facility over to defense contractors such as Rheinmetall or Rafael from 2027 onward.
BMW, facing its own headwinds, announced accelerated cost-cutting on June 16 after issuing a profit warning. The Munich-based premium carmaker expects its pre-tax profit to fall by at least 10% and booked a one-time charge of roughly €1 billion for the second half of the year. CEO Milan Nedeljkovic, who took office in May, cited a 20% drop in China sales from January to May and the impact of the war in Iran as the main reasons.
BMW plans to cut between 1% and 5% of its global workforce of around 155,000. That follows roughly 3,000 job cuts already carried out in 2025.
The crisis is hitting suppliers just as hard. On June 15, Mahle announced it would eliminate another 1,000 jobs worldwide, mainly in administration and research and development. The Stuttgart-based company aims to save €150 million annually from 2027, with around half the reductions occurring in Germany through severance and early-retirement programs. Mahle cited competitive pressure from China, U.S. tariffs, and the phase-out of the internal combustion engine as the drivers. At the end of 2025 the company still employed about 10,000 people in Germany, after already shedding 600 positions earlier.
The combined announcements underscore a structural transformation that has erased roughly 100,000 jobs in the German auto industry since 2019, according to data from Berylls by AlixPartners. The 49,000 lost in 2025 represent a 6.5% decline.
Industry experts point to Germany’s high location costs as the root cause. Labor costs exceed €40 per hour in Germany, compared with about €30 in the United States and under €10 in China. Industrial electricity prices of up to 20 euro cents per kilowatt-hour are significantly above U.S. levels. The strain on the broader economy is evident: in the first quarter of 2026, Germany recorded more than 4,500 corporate insolvencies, the highest figure in 20 years.
