Volkswagen restructuring efforts took a major step forward Thursday after the company’s supervisory board unanimously approved Future Plan 2030, clearing the way for another 50,000 job cuts and potentially putting four German assembly plants at risk over the next several years.

Volkswagen Board Approves Future Plan 2030

Volkswagen Group CEO Oliver Blume secured a major victory with the supervisory board’s approval, which came a day earlier than expected. The decision follows months of opposition from labor unions and the government of Lower Saxony.

The approval does not end tensions between Volkswagen employees, labor unions and the state of Lower Saxony, which owns a 20 percent stake in VW Group and helped labor leaders block an earlier version of the proposal in July.

This week’s vote was unanimous after labor representatives helped shape the final plan. Unions are expected to remain vocal in demanding socially responsible workforce reductions.

“In this crisis situation, we fought hard for good solutions,” said Christiane Benner, Deputy Chair of the Supervisory Board and First Chairwoman of IG Metall. “This explicitly includes developing future scenarios for all plants. As Germany’s largest industrial company, Volkswagen continues to bear an enormous responsibility toward its employees and the regions it operates in.”

Four German Plants Face Uncertain Futures

Volkswagen’s plants in Emden, Zwickau, Hanover and Neckarsulm are in question for new product allocations between 2031 and 2034.

The automaker said that “alternative uses for these plants are being assessed,” leaving the future role of the facilities subject to further evaluation.

Volkswagen Targets Another 50,000 Job Cuts

Volkswagen Group has 628,000 employees, making it by far the world’s biggest automaker based on headcount and four times the size of General Motors, according to Bloomberg. In Germany alone, VW has 284,000 employees.

The company is dealing with tariffs, falling sales in China and excess manufacturing capacity. Its latest plan calls for another 50,000 jobs to be eliminated by 2030, on top of an earlier target of 50,000 reductions that has already resulted in separations for about 37,000 employees.

Some future reductions could potentially come through retirements and voluntary separations. If Volkswagen were to institute a hiring freeze and experience 5 percent natural attrition, 31,000 fewer jobs would result in just one year for a company of its size.

Attrition Could Risk Losing Key Employees

Analyst Sam Abuelsamid said relying on natural attrition creates a challenge because Volkswagen would need to retain the right employees to accomplish its goals.

“You’re more likely to lose your most valuable employees to competitors because they don’t want to stick around,” Abuelsamid, vice president of Telemetry Insights, told CarBuzz via email. “You also tend to retain those that don’t feel like they have anywhere else to go, and they may not be the people that are able to execute on transformation.”

Regardless of how Volkswagen carries out the downsizing, the process will be painful, said Sam Fiorani, vice president of global forecasting for AutoForecast Solutions.

Volkswagen’s German workforce has an average age above 45, while only about 5 percent of workers are older than 60, Fiorani told CarBuzz via email.

Plant Cuts Cannot Be Solved Through Attrition Alone

Fiorani said Volkswagen’s Emden and Neckarsulm plants are significantly underutilized, making profitable operation very difficult.

“Zwickau is expected to lose a number of products over the next few years,” he said. “The fourth plant is Hannover, which is important for the commercial sector and will require relocation of the full-sized vans produced there, likely to a plant in Eastern Europe.”

Volkswagen Group is also considering significant restructuring across its eight automotive brands. The process is already happening at Porsche, for instance.

Scout, which is based in the U.S., would become VW Group’s newest brand and its ninth. In Spain, the Cupra brand, operating under the SEAT SA parent company, has a brighter future because of its focus on high performance, aggressive styling and electrified models.

SEAT Brand’s Future Under Assessment

The board’s approval also puts increased attention on the mainstream SEAT brand, which is under the same SEAT SA umbrella.

SEAT SA management said Thursday that the future of the SEAT brand is under assessment. The company said the economics of electrification and demanding regulations “make the decision for further investment in the SEAT brand increasingly challenging.”

Without a significant turnaround by 2030, “a gradual phase-out of the SEAT brand” is being considered, SEAT SA said in a statement.

Despite challenges in Spain and Germany, VW Group is more optimistic about North America, where it “will focus on the most profitable segments,” although the company did not specifically name those segments. Porsche, Audi and Lamborghini may be among the brands being referred to.

What Future Plan 2030 Means for Volkswagen

With the supervisory board approving the decision to move “forward with full force” on Future Plan 2030, Volkswagen will cut its model portfolio in half. The prioritized models will receive more attention in terms of design and technology, while fewer variants will be offered.

The plan is intended to achieve higher sales volume per model, lower costs and stronger economies of scale.

At the same time, Volkswagen Group’s decision to focus on the most profitable segments in North America raises questions about the future of the mainstream Volkswagen brand in the U.S., where it has struggled for decades while other transplants have thrived.

That question has been raised many times before, but there is still no clear answer.