Volkswagen Chief Visits Emden Plant on Borrowed Time, Delivers Stark Message on Labour Costs

Volkswagen chief executive Oliver Blume travelled to the company's Emden factory in north-western Germany on Wednesday to face employees at one of the carmaker's most scrutinised sites, telling them that wage-related costs there run at more than twice the level of comparable locations elsewhere in Europe.

Blume framed the comparison not as an accusation but as a benchmarking exercise the company cannot avoid. "We measure ourselves against the best sites in Europe - with the goal of securing the lasting competitiveness of our group," he said during his appearance before the workforce, adding that production expenses at rival plants were considerably lower than those in Emden.

"That is not a criticism, it is the reality against which we must measure ourselves," the executive said, according to remarks reported by the German press agency dpa.

His visit had been anticipated for some time. Emden has surfaced again and again on internal lists of Volkswagen facilities considered vulnerable, and any appearance by the group's top manager there carries weight for the thousands of workers whose livelihoods depend on the site. Blume arrived at the local airfield at 9 am (0700 GMT) aboard a Pilatus PC-4 business aircraft operated by Volkswagen AirService before heading to the plant.

At the heart of the uncertainty is the company's own assessment that four German factories lack a realistic path to full capacity in the 2030s: Emden, Zwickau and Hanover, along with Audi's Neckarsulm site. Blume reiterated that outlook on Wednesday while stressing that no decision has been taken to shut any of them down.

Instead, he pointed to a defined window for finding solutions. "Our goal is to create viable prospects for all sites within the next six to 12 months," Blume told those gathered, signalling that model allocations and future assignments for the plants should be settled within roughly a year.

He also signalled that failure would carry consequences rather than mark the end of management's engagement. "Should it turn out in the end, despite all efforts, that a follow-on allocation is not possible, our responsibility does not end there," he said.

Beyond the fate of individual factories, Blume used the visit to outline how deeply the group's austerity drive will reach into its corporate structure. Volkswagen plans to eliminate one in four management jobs, he announced, describing the reduction as part of the broader effort to bring spending under control.

"All areas must play their part; it is a major effort that can only succeed together," the chief executive said, making clear that white-collar departments would share the burden borne so far largely by assembly lines.

The next stage of savings, he explained, will concentrate on expenditure outside direct vehicle manufacturing - targeting group-level posts, central administrative functions, development operations and the sales organisation.

The measures form part of a programme Blume flagged earlier in the year, when he said he was developing a new "target vision 2030" for the group and intended to sharpen significantly the company's cost-cutting trajectory.

For Emden's employees, Wednesday's message was double-edged: reassurance that no closure verdict has been issued, paired with an unvarnished warning that the plant's high cost base leaves it competing against leaner European rivals for whatever vehicles the group assigns next.

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