VW CEO Blume: Closing a Factory Is Always the Last Resort
Volkswagen CEO announces deep transformation of the group, but rejects plant closures as a primary option. The Osnabrück plant could be repurposed for the defense industry.
Volkswagen CEO announces deep transformation of the group, but rejects plant closures as a primary option. The Osnabrück plant could be repurposed for the defense industry.
Volkswagen AG CEO Oliver Blume stated in an interview with German public broadcaster NDR, published on July 24, 2026, that closing factories is always the last and most expensive option and that the group is facing the most comprehensive transformation program in its history. Blume spoke at a time when VW is confronted with declining sales, especially in the Chinese market, American tariffs, and increasingly fierce competition from Chinese automakers.
About two weeks before the interview was published, Blume presented a plan to Volkswagen's supervisory board that included job cuts and possible plant closures. The supervisory board rejected the plan. Blume emphasized to NDR that around 80 percent of the measures do not require supervisory board approval and that the group has already begun implementing many of the planned steps. However, decisions concerning factories, employees, and corporate structures require the supervisory board's consent.
"Closing a factory is always the last and most expensive solution. That's why I always prefer to talk about intelligent solutions based on competitiveness, where we still have many options," Blume said in the NDR interview.
Blume emphasized that this is a crisis for the entire automotive industry, not just Volkswagen. According to him, the market has fallen by 20 percent this year, Chinese manufacturers are increasingly aggressively entering the European market, and American tariffs add to the pressure. In response, VW has already removed two million vehicles from its production network and now plans to remove an additional million vehicles-500,000 in China and 500,000 in Europe.
The situation regarding the Osnabrück plant is particularly interesting. A 2024 agreement stated that production of Volkswagen vehicles will cease in 2027. Blume confirmed that advanced negotiations are currently underway with representatives of the defense industry about a potential repurposing of the plant, but he did not reveal details or which specific company is involved. He announced that information about the fate of the Osnabrück plant will be released by the end of this year.
When asked whether VW could turn to the defense industry as a way out of the crisis, Blume gave a clear answer: Volkswagen will not invest in weapons, but is ready to offer its expertise and capacity in the area of military transport and defense systems. He noted that the defense industry has a great interest in automation and skilled professionals, which VW can provide.
Blume dismissed suggestions that the federal state of Lower Saxony, as a VW shareholder, should have less influence on the group. He emphasized that he has constructive talks with Prime Minister of Lower Saxony Olaf Lies and that the state "is and will remain the home" of Volkswagen. By the end of the year, Blume said, he plans to bring clarity about the entire transformation program and the direction the group is taking.
