In January 1965, Volkswagen acquired a 50.3% stake in Auto Union; by the following year, it had achieved full ownership. Auto Union later revived the Audi brand, and Volkswagen began shifting from reliance on a single core model toward multi-brand operations. 1934 Audi 220—the earliest civilian Audi sedan bearing the four-ring emblem 02 By the 1970s, Volkswagen’s own crisis had arrived. The Beetle’s prolonged success had left Volkswagen sluggish in the new wave of automotive competition. After the oil crisis, consumers grew increasingly concerned about fuel efficiency, while Japanese automakers—thanks to their superior fuel economy, reliability, and lower ownership costs—gradually entered European and North American markets. By comparison, the Beetle’s air-cooled engine faced limitations in noise control and thermal management, and its rear-engine layout constrained interior cabin and luggage space design. Facing rising market demands for fuel efficiency, comfort, and space utilization, Volkswagen needed to chart a new technological course. In 1973, Volkswagen launched the Passat; in 1974, the Golf debuted. This model featured a front-engine, front-wheel-drive layout and a hatchback body—delivering practical passenger and cargo space within a relatively compact footprint, and enabling easier development of multiple variants. In October 1976, the one-millionth Golf rolled off the production line—just 31 months after series production began. The Golf’s success gave Volkswagen a second pillar beyond the Beetle. In 1986, Volkswagen acquired SEAT; in 1991, it acquired Škoda. In 1993, Ferdinand Piëch assumed the role of Chairman of the Board of Management of Volkswagen AG. Over the next decade, Volkswagen accelerated its brand expansion and product portfolio development significantly. Piëch was the grandson of Ferdinand Porsche and an automotive manager with an engineering background. He held deep interest in automotive technology—especially in engine, platform, and component development. In his view, the Volkswagen Group should not merely be a mass-producer of ordinary cars, but rather a conglomerate encompassing brands spanning diverse price segments—allowing shared access to group-wide technologies and manufacturing resources while preserving each brand’s distinct product positioning. First-generation Volkswagen Golf Mk1 In 1998, the Volkswagen Group began expanding into the premium automotive segment. That year, Volkswagen acquired Bentley; Audi acquired Lamborghini; and the Volkswagen Group took over Bugatti, restarting research, development, and production of this storied French marque. Although Volkswagen already owned several luxury brands, Piëch decided that Volkswagen—the brand synonymous with affordable family cars—should launch a large luxury sedan directly competing with the Mercedes-Benz S-Class and BMW 7 Series. In 2002, the Phaeton debuted. Its development cost exceeded €1 billion. Volkswagen built a transparent factory in Dresden, where visitors could observe vehicle assembly through glass walls. To meet luxury-car standards, the Phaeton incorporated sophisticated engineering—including a 12-cylinder engine, all-wheel drive, and numerous electronic systems. Its development involved far more than simply adding features to an ordinary Volkswagen: the body, powertrain, and comfort systems were all re-engineered from the ground up to fulfill the requirements of a full-size luxury sedan. Engineers could solve technical problems—but another challenge proved far less tractable: Would consumers truly pay prices comparable to those of Mercedes-Benz or BMW for a car bearing the Volkswagen logo?

Volkswagen’s Layoffs: This Issue Won’t Go Away

These workers clearly refused to accept the plan, and immediately staged a strike rally that same day. Thousands gathered in Wolfsburg—the location of Volkswagen’s headquarters—for a protest march, declaring that the company must not close any of its plants. The workers’ vigorous protests yielded no positive news. Volkswagen AG’s Works Council Chairman, Klaus-Carl Käfer, stated that, in addition to layoffs and plant closures, Volkswagen also planned to cut employee salaries by at least 10%, and would grant no wage increases in either 2025 or 2026. On October 30, Volkswagen and the union held their second round of negotiations. The union demanded renewal of the employment security agreement, but Volkswagen rejected the request—leading once again to a failed negotiation. 02 Workers’ Compromise and Resistance On December 9, the fourth round of negotiations lasted a full eight hours—with neither side yielding an inch. Consequently, both parties scheduled further talks for December 16–17. The deadlock stemmed partly from how the outcome might redefine the hierarchy of priorities in labor-management relations. The union expressed strong dissatisfaction with the negotiation progress. Under the organization of IG Metall, Volkswagen employees launched a new wave of warning strikes. These strikes affected nine of the group’s ten German plants, with workers walking off the job for four hours. The workers had indeed made concessions before. On November 20—on the eve of the third round of labor-management negotiations—they proposed a ‘Sustainability Plan,’ likely motivated by income losses from prior strikes and mounting living costs due to German inflation: Workers voluntarily waived their 2025 and 2026 bonuses, and redirected the portion of wages tied to age-related salary increments into a fund. During periods of overcapacity, they would voluntarily reduce working hours—and rely on funds drawn from this pool to support their families. This proposal would preserve jobs while saving Volkswagen €1.5 billion. If Volkswagen accepted it, tensions could be resolved amicably. But if Volkswagen insisted on plant closures and mass layoffs, workers threatened to escalate warning strikes further. Business is driven by interests. After two months of stalemate, whichever side conceded first would inevitably face intensified pressure from the other. Moreover, Volkswagen Group’s financial reserves vastly exceed those of individual employees—giving it far greater stamina to endure protracted negotiations. Unsurprisingly, Volkswagen rejected the proposal, accusing the union of offering it solely to buy time—and continued insisting on a 10% wage cut. At this point, the ‘peace obligation’ agreement prohibiting strikes between Volkswagen and its workers had expired. As of December 2, virtually all Volkswagen plants in Germany gained the legal right to strike. Thus, the December 2 strike action spanned nine plants—including Wolfsburg, Braunschweig, Hannover, Salzgitter, Emden, and Kassel—as well as several subsidiaries, involving approximately 120,000 employees. It marked Germany’s largest strike since 2018. Workers staged a two-hour strike: morning-shift employees walked off for two hours, while night-shift workers planned to leave early. The strike halted assembly lines, disrupting production across multiple Volkswagen models. Thousands of protesting employees gathered at Volkswagen’s largest plant in Wolfsburg to oppose the proposed wage cuts. On December 4, Volkswagen CEO Oliver Blume delivered a speech at an employee meeting—repeatedly met with loud boos from the audience.

Volkswagen Workers Threaten Strikes Unless Wage Deals Are Reinstated

Oct 23, 2026

Volkswagen workers threatened strikes starting January unless the company reinstates cancelled wage deals, amid plans to cut 100,000 jobs and close plants due to EV transition costs and Chinese competition.

reuters

Volkswagen Workers Threaten Strikes Unless Wage Deals Are Reinstated

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