Schäfer warns VW workers: more cost-cutting lies ahead

Volkswagen Brand Chief Thomas Schäfer told workers at the automaker’s first staff assembly of 2026 that it cannot afford to slow down its efficiency drive and cost-cutting campaign. “We are heading in the right direction, but we have not yet reached our goal and must not slacken our efforts now,” he emphasised.

The savings push in the latest development following the automaker’s December 2024 ‘Zukunft Volkswagen’ settlement, which averted factory closures and compulsory redundancies after weeks of warning strikes involving more than 100,000 workers. The deal succeeded in preserving all ten German plants, capped job reductions at 35,000 through voluntary attrition by 2030, imposed a wage freeze through 2028-29, and cut annual capacity across German facilities by 734,000 units. 

Volkswagen has also reported unexpectedly strong preliminary net automotive cash flow of €6bn for 2025—up from an earlier forecast of zero—prompting Works Council Chief Daniela Cavallo to demand a recognition bonus for employees, a decision deferred until after the council election scheduled for next week.

The comments came alongside confirmation that Volkswagen’s five-year investment plan will be hacked down to €160bn (US$186bn) from €180bn two years ago. Cavallo used the same platform to demand tighter central control over the group’s sprawling brand portfolio. “Our Volkswagen in Wolfsburg needs to return to being a central hub for the entire group,” she said. “We simply can no longer afford individual brands operating on their own terms.” 

Cavallo concluded by calling upon Chief Executive Oliver Blume to “rein in brand egotism”. One of the more noteworthy purported manifestations of this issue was in software development at Cariad, which the works council chief had attributed back in 2024 to brand egotism—not an intrinsic lack of software development expertise.

The investment reduction and continued cost pressure reflect the same headwinds Schäfer named directly: weak US sales, rising Chinese competition, and the costs of the transition to electric vehicles (EVs). To this end, the automaker is targeting a 20% reduction in costs across all brands by 2028—a figure that could correspond to savings of around €60bn—through platform consolidation, reduced R&D duplication, and production efficiencies. 

However, it is Volkswagen’s China business, which accounts for roughly 30% of total deliveries, that has been shrinking most alarmingly as domestic competitors take share at pace. That trend, more than any other, appears to be the force driving Wolfsburg’s urgency. China is the world’s largest automotive market by sales volume and the global leader in EV adoption and—arguably—technological prowess. 

The assembly also produced the first public preview of the Golf 9: a black-and-white silhouette shown on the venue’s main screen, with a side profile described as closely resembling the current Golf 8. Production of the existing Golf model will move to Mexico in 2027 to free up Wolfsburg capacity for EV conversion, with the battery-electric Golf 9 due to roll off the main plant line by the end of the decade.