The package that Volkswagen management has kept on the agenda since July, described as the biggest transformation plan in the company's history, foresees the closure of some factories, the separation of strategic departments, and the layoff of approximately 50,000 employees.

While the German company is seeking billions of euros in savings due to high labor costs, underperforming factories, and intensifying Chinese competition, German labor unions are strongly opposing the factory closure plans.

The company's supervisory board will convene on Friday to vote on three different restructuring proposals currently on the table. If no compromise emerges from the vote, the crisis is expected to escalate and the company to hold an an extraordinary general meeting.

Ahead of the critical meeting, IG Metall has issued warnings that production could come to a halt, even though no official strike decision has yet been announced.

According to reports in the German press, intensive efforts to reach a compromise between the parties on September 1st were unsuccessful.

Ahead of Friday's critical meeting, which will determine the company's future, there are three different proposals put forward by the parties.

The management side is focusing on a package that includes harsh measures to reduce costs. This plan foresees the gradual and complete closure of four factories in Emden, Zwickau, Neckarsulm, and Hannover between 2031 and 2034. In addition to the decision to close factories, the layoff of tens of thousands of employees worldwide is also central to the management's plan.

However, labor unions and employee representatives are resolutely opposing radical cuts. The alternative proposal put forward by the employees aims to preserve the current employment volume and prevent the closure of any production facilities. Representatives demand that savings be achieved not by closing factories, but by restructuring operational processes.

The State Government of Lower Saxony, which plays a key role in the process, has presented an interim solution for resolving the crisis. The state government, which holds a 20 percent strategic stake in Volkswagen and has the right to block decisions due to the company's special status, advocates for a compromise plan that considers employment balance and aims to bring the parties together at a common point.

At the aforementioned meeting to be held on Friday, it will become clear which of these three scenarios will be accepted or whether a new crisis will be triggered.

"We will not stand by idly"

Thorsten Gröger, IG Metall's Regional Officer for Lower Saxony and Chief Negotiator for Volkswagen, stated on the matter, "If the management board wants this conflict, it will get it. However, we clearly do not want a conflict."

Gröger emphasized that the union would not accept any measures that provide short-term relief but ultimately lead to the complete closure of factories, adding, "IG Metall will not stand by idly while the industrial base and thus the future of production facilities are jeopardized."

Gröger stated that information leaked from within the company and reports in the media indicate that the management board is preparing for comprehensive structural changes, and that it would be wrong to think such decisions could be made without the approval of the VW Supervisory Board.

Gröger said, "This situation is the greatest proof that the management board must return to reason immediately," and called for serious dialogue with employee representatives instead of generating new crisis scenarios through the media.