A sudden appearance of €6 billion on Volkswagen’s books has deepened tensions between management and the works council. No one can definitively say where the money came from, but union leaders fear it will be poured into dividends and bonuses rather than used to safeguard German factories. The dispute comes at a precarious moment: CEO Oliver Blume has warned that the company’s traditional business model is broken, and pressure on the executive board is mounting.
The numbers underline why the cost-cutting push is so brutal. Volkswagen sold roughly nine million vehicles worldwide in 2025, down from eleven million in 2019. The
Volkswagen is betting that low-cost electric cars made in southern Europe will help turn things around. Production of the ID. Polo and Cupra Raval will start at the plant in Martorell, Spain, in June 2026. The company has invested roughly €10 billion in converting the facilities there, planning an annual output of 300,000 vehicles priced just under €25,000. Building them in Germany is simply not profitable due to high manufacturing costs. Works council chairwoman Daniela Cavallo is demanding that German plants get to build the higher-margin models as compensation.
At the main factory in Wolfsburg, employees are enjoying a temporary reprieve from the gloom. Summer heat has prompted management to allow earlier starts – as early as 6 a.m. – and a relaxed dress code until September. More than 2,500 staff took part in the fourth international health run. But technical frustrations persist: Volkswagen has disabled the API interface for its CarNet services, blocking third-party software from reading or controlling vehicle data. Customers and developers have strongly criticized the restriction. Subsidiary brands such as Skoda are examining whether they can at least restore basic functions.
Meanwhile, Lower Saxony’s economics minister, Olaf Lies, has floated the idea of bringing in Chinese partners such as Xpeng to co-produce at German factories. The proposal highlights how far the industry’s center of gravity has shifted, and how desperate traditional players are to find a way out of the crisis.
