In a bid to protect domestic manufacturing, a powerful Volkswagen shareholder has proposed that the embattled automaker could secure thousands of German jobs by producing vehicle models in Germany that it currently designs and manufactures exclusively in China.
The strategy was pitched by Olaf Lies, the Premier of the German state of Lower Saxony, during an interview with the German news agency DPA over the weekend. His remarks follow alarming reports on Friday indicating that Volkswagen is contemplating the closure of four domestic factories and drastically escalating its restructuring plans, potentially slashing up to 100,000 jobs, News.Az reports, citing Reuters.
“If we produced vehicles here that we currently make in China, we could stabilize capacity utilization of our plants,” Lies stated. “This would also create the opportunity for new development and innovation at our locations. To me, it’s about stabilizing employment and capacity utilization at our plants, instead of watching others build new plants outside of Germany.”
The political and economic stakes are extraordinarily high for Lower Saxony. The state houses Volkswagen’s global headquarters and controls five of the automaker’s six primary western German assembly plants, backed by a powerful 20% voting stake in the company.
Volkswagen’s management has warned that its current business model has become unsustainable due to a perfect storm of macroeconomic pressures: fierce competition from low-cost Chinese EV rivals, aggressive U.S. import tariffs, and a prolonged slump in consumer demand across Europe. Lies, a member of the center-left Social Democrats, previously floated the concept of importing Chinese-market production lines to European soil following a diplomatic trade mission to China in April.
The push to optimize domestic assembly lines is already echoing across the broader corporate group. On Saturday, the Frankfurter Allgemeine Zeitung reported that Volkswagen’s luxury subsidiary, Porsche, is actively reviewing plans to relocate assembly of its flagship Cayenne SUV from Slovakia to its Leipzig facility in Germany to help shore up local capacity utilization.