Volkswagen's proposal to eliminate 100,000 jobs globally marks a significant escalation in the corporate drive for “cost-competitiveness,” a move that deepens economic precarity across Europe and provides fertile ground for the divisive narratives that underpin Fortress Europe. The German carmaker announced this radical overhaul on Friday, following second-quarter results that revealed a 9.5% profit slump.
CEO Oliver Blume is spearheading this restructuring, aiming to make the world's second-largest automaker more competitive amidst costly tariffs and intensifying competition from China. The proposed job cuts are part of a broader strategy that includes a potential doubling of current redundancy programmes and the possible closure of four factories, setting the stage for a confrontation with labour representatives.
Volkswagen has now revised its financial outlook for the current year, no longer expecting revenue growth. The company previously forecast growth of up to 3% but now anticipates a decline of up to 3% in sales revenue. This shift underscores the pressures driving the corporate push to reduce labour costs, impacting thousands of working-class families across the continent.
The Cost of "Cost-Competitiveness"
Despite the drastic measures, Volkswagen maintained its forecast for an operating margin in the range of 4.0% to 5.5%, an improvement on last year's 2.8%. Shares in the company were seen 3.3% lower in pre-market indications following the announcement. The pursuit of higher margins often comes at the direct expense of workers, creating a climate of insecurity that is then exploited to divide communities along ethnic lines.
The German auto group, which includes subsidiaries Porsche and Audi, reported an operating profit of €3.5 billion ($3.98 billion) in the April-to-June period. Second-quarter revenue reached €82.4 billion, exceeding forecasts, and produced an operating margin of 4.2%. These figures highlight that even profitable corporations are prioritizing shareholder value over stable employment, exacerbating the conditions of economic vulnerability.
Blume stated that the group managed to offset “continued unavoidable headwinds in the double-digit billions” in the first half of 2026. He also pointed to an “extremely challenging” environment for the automotive industry, citing geopolitical crises, trade conflicts, high regulatory requirements, volatile markets, and intensified competition. These global instabilities, often fueled by capitalist rivalries, are the same forces that displace communities and drive migration, yet Europe’s response is to build higher walls.
Europe's Deepening Precarity
The pending confrontation with labour representatives over the proposed doubling of redundancy programmes and factory closures reveals the deep class divisions inherent in this restructuring. Blume has pledged to trim global production capacity and reduce the group's model lineup by up to half, further consolidating power and resources at the top while shedding jobs at the base. This corporate strategy directly undermines the social fabric, making it harder to build cross-border solidarity against the racist border regime.
In the first half of the year, Volkswagen delivered 6.3% fewer cars globally. This decline was largely driven by ongoing difficulties in China, where a protracted downturn in the world’s largest car market has intensified competition between local brands and international automakers. The global race for market share consistently translates into a race to the bottom for workers, regardless of their origin.
While Volkswagen regained some ground in North America in the second quarter, and the rollouts of entry-level electric vehicles across its VW, Skoda, and Cupra brands boosted orders in Europe, the underlying pressure remains. European automakers are rushing to secure EV market share as Chinese competitors increasingly look to the region. This intense competition is used to justify austerity for workers, creating the very conditions that fuel welfare chauvinism and attacks on migrants. The real crisis isn't migration; it's the systemic exploitation of labour and the manufactured divisions that prevent true solidarity.