Germany’s Auto Heartland Reels as VW Weighs 100,000 Job Cuts and Mercedes Faces Mass Walkouts
04.07.2026 - 04:05:01 | boerse-global.de
Volkswagen is contemplating one of the largest workforce reductions in German industrial history, with plans to shed up to 100,000 positions and close as many as four plants. The shock proposal, confirmed by company insiders, threatens to shatter long-standing job guarantees that have anchored labour relations at the Wolfsburg giant for decades.
Works council chief Daniela Cavallo warned that the security pacts protecting workers until 2030 are now being openly questioned. A breach of those agreements could trigger heavy penalty payments. From the political sphere, Julia Hamburg, a Volkswagen supervisory board member representing Lower Saxony, rejected any factory closures outright.
Parallel to the upheaval at Volkswagen, more than 33,000 employees of Mercedes-Benz took to the streets across Germany on 3 July. The protests, called by IG Metall, focused on plants in Sindelfingen, Untertürkheim, Rastatt, Bremen and Berlin. Mercedes’ own security estimated the turnout at roughly 16,000, while the union’s figure was double that. At the Sindelfingen site alone, the works security counted about 10,000 participants.
The trigger is a cost-cutting push by the board under CEO Ola Källenius. Management wants to extend the standard working week to 40 hours without additional pay and largely scrap remote-work options. It has also delayed a special payment—a so-called transformation component equal to 18.4 percent of one month’s salary—for roughly 90,000 employees.
Works council head Ergun Lümali called the plans an assault on established standards. “The workforce will not go along with this course,” he said. Already, a car rally has been announced for Stuttgart on 9 July.
Solidarity from other premium brands quickly emerged. Peter Schlagbauer, works council chair at Audi, and Martin Kimmich, his counterpart at BMW, voiced full support. Schlagbauer warned that attacks on collective agreements at one manufacturer could spill across the entire industry.
The mood inside the factories mirrors a deteriorating sector-wide outlook. The Ifo industry barometer for German carmakers fell to minus 21.4 points in June. Mercedes-Benz itself posted a 17 percent profit decline in the first quarter of 2026, down to €1.43 billion, blamed largely on weak sales in China. The company’s operating margin stood at 5.7 percent.
Restructuring has already cost tens of thousands of positions. According to industry analysts, roughly 50,000 jobs were cut in the German automotive industry in 2025 alone. Since 2019, the total loss has reached around 111,000 roles. IG Metall chairwoman Christiane Benner is calling for stepped-up investment in domestic sites rather than one-sided savings programmes that hit employees hardest.
