BRUSSELS — Volkswagen’s growing crisis — with the company proposing factory closures and thousands of layoffs — is turning into political rocket fuel for the far-right Alternative for Germany party ahead of Sunday’s state election in Saxony-Anhalt. Volkswagen CEO Oliver Blume is going before the automaker’s board on Friday in his latest bid to push through a sweeping cost-cutting plan that would slash 100,000 jobs, along with closing four German factories — action the company has never before taken. The deepening crisis at Germany's largest company comes at a terrible time for Merz, who promised to reform the economy and revitalize the country’s industrial base when he took power in 2025.
Instead, automotive suppliers, chemical companies and other manufacturing firms are bleeding jobs, energy prices are high and the country is facing a growing wave of Chinese exports that threaten to gut important industries. All of those worries are coalescing around VW, an industrial powerhouse that employs over 280,000 people in Germany. VW embodies German social capitalism like no other company,” said Klaus Dörre, a German sociologist specializing in right-wing populism and industrial transitions.
Unions and politicians are threatening resistance in case Blume goes through with his promised cuts. "We will not agree to any strategy that presents plant closures and the reduction of industrial jobs as a supposedly easy solution," said a spokesperson for Olaf Lies, the Social Democratic Party premier of Lower Saxony, where Volkswagen is headquartered. Politicians from Lower Saxony, including Lies, sit on the supervisory board along with members of the powerful IG Metall union, making any restructuring difficult to push through.
We will oppose it with all our might. We will not allow our sites to bleed out,” Thorsten Gröger, IG Metall’s district manager for Lower Saxony and Saxony-Anhalt, said at a meeting between union representatives and German politicians on Aug. 31. That mood is helping the AfD, which is within striking distance of winning an outright majority in the eastern state of Saxony-Anhalt on Sunday.
Such a win would give a far-right party governing power in a German state for the first time since World War II. The AfD is similarly on the rise in Berlin and Mecklenburg-Vorpommern — both holding elections this month. "No chancellor has driven the economic misery and deindustrialization of our country as much as Friedrich Merz," said AfD co-chair Alice Weidel in a statement.
While there is no VW plant in Saxony-Anhalt, the far-right party is seeking to capitalize on a growing national panic about the automaker's fate and the decline of German industrial might. The AfD blames the auto sector’s decline on Merz and on the EU’s climate agenda, which initially proposed banning new combustion-engine vehicles starting in 2035. The European Commission walked back the measure in December, but negotiations are continuing in Brussels over what emission-reduction targets automakers must reach or face fines.
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