Volkswagen has secured union backing for its most extensive restructuring in 89 years, agreeing to cut about 50,000 additional jobs on top of prior reductions. CEO Oliver Blume must now implement the plan to address costs 30 percent above rivals and slash production capacity by over 500,000 vehicles annually. The deal brings total job cuts to around 100,000 by 2030, or 15 percent of the global workforce, and aims to halve the number of models while reducing annual output to nine million cars from a pre-pandemic target of 12 million.

Shares rose nearly 6 percent on Friday, though the stock remains down about a quarter this year. Analyst Matthias Schmidt warned the agreement only postpones core problems amid fierce Chinese competition, U.S. tariffs, and margin pressures. The fate of four German plants in Emden, Hanover, Zwickau, and Neckarsulm remains uncertain beyond 2030, with potential defense industry conversions under discussion.

Volkswagen also faces declining sales in China, where local rivals dominate electric vehicle markets, and explores options like selling China-developed cars in Europe or sharing capacity with Chinese partners. Despite hopes for revival, experts like Harald Hendrikse of Citi Research doubt defense conversions can offset declines, while Jacob Gunter of the Mercator Institute notes German automakers were unprepared for China’s rapid EV shift.