Germany is a warning to America: even one of the world’s most celebrated manufacturing powers cannot assume its industrial strength will last forever. Volkswagen’s latest restructuring plan shows how quickly market pressure, excess capacity and stronger foreign competition can place factories and livelihoods at risk.
Volkswagen’s supervisory board has approved a plan calling for another adjustment of roughly 50,000 positions worldwide by 2030. That comes in addition to approximately 50,000 reductions already underway across Volkswagen Group operations, bringing the combined restructuring discussed by the company to around 100,000 positions.
That does not mean 100,000 German workers will suddenly receive layoff notices. Many of the earlier reductions are intended to occur through attrition, early retirement and other voluntary measures. But the scale still tells us something important: manufacturing leadership is never permanent.
Volkswagen faces a historic restructuring
Volkswagen employs roughly 650,000 people globally and owns some of Europe’s best-known automotive brands, including Audi, Porsche, Škoda and SEAT. Yet the group reported a 30 percent decline in after-tax earnings during the first half of 2026 as sales weakened in China and competitive pressure intensified.
The company says it has about 500,000 vehicles of excess annual production capacity in Europe. Its newly approved plan also places the future production role of four German plants—Emden, Zwickau, Hanover and Neckarsulm—under scrutiny while possible alternative uses are evaluated.
This follows an earlier agreement to reduce technical production capacity at Volkswagen’s German plants by approximately 734,000 vehicles. That agreement also called for more than 35,000 socially responsible workforce reductions at German locations by 2030.
Chinese automakers are changing the market
Volkswagen’s challenges have more than one cause. Tariffs, high costs, Europe’s weaker vehicle market, slow decision-making and the expensive transition to electric vehicles all matter. Still, the rise of Chinese automakers is an unmistakable part of the story.
Chinese companies have become faster, more sophisticated and more competitive, especially in electric vehicles. Volkswagen has lost substantial ground in China, once one of its strongest markets, while Chinese brands have expanded their presence across Europe.
Germany is a warning, not a prediction
International manufacturers captured a record 47 percent of Germany’s new-car market in August 2026. That figure includes companies from many countries, not only China, but it illustrates how quickly the competitive landscape is changing inside the home market of Volkswagen, BMW and Mercedes-Benz.
Germany remains an automotive powerhouse. Its manufacturers still possess world-class engineering, valuable brands, advanced suppliers and a highly skilled workforce. The lesson is not that Germany has already lost its auto industry. The lesson is that history and reputation alone cannot protect an industry.
America should pay attention. We have watched domestic production disappear from other industries after buyers, companies and policymakers assumed the supply chain would always be there. Once factories close, the machines, supplier networks and skilled jobs are extraordinarily difficult to rebuild.
Look beyond the badge on the grille
Buying an American-made vehicle is not as simple as choosing an American-sounding brand. Toyota builds vehicles in Kentucky. Honda manufactures in Ohio, Alabama and Indiana. BMW operates its major plant in South Carolina, while Mercedes-Benz builds vehicles in Alabama.
Ford, General Motors, Tesla and other manufacturers also employ thousands of Americans across domestic assembly and component plants. At the same time, not every vehicle wearing a familiar American badge is assembled in the United States.
The badge matters less to an American assembly worker than the location of the factory. Before purchasing a vehicle, check the final assembly point, the origin of major components and the information on the federally required window label.
American factories need American customers
Fair trade and sound industrial policy matter. The United States should defend its industries from market-distorting subsidies, protect critical supply chains and create an environment where companies can afford to invest and produce here.
Government policy, however, cannot do everything. Consumers send an economic signal with every major purchase. When we choose vehicles assembled by American workers, we support far more than one factory job. We help sustain parts suppliers, logistics companies, toolmakers, restaurants, schools and communities.
The economic value of an assembly plant reaches far beyond the vehicles leaving its doors. Each plant supports networks of steel, glass, electronics, seating, tires, transportation and maintenance suppliers. A purchase made at a dealership can help determine whether those supplier relationships keep growing in American towns or migrate elsewhere. That is why final assembly and domestic content deserve more attention than advertising slogans.
Germany’s experience should not become America’s future. A nation does not keep a manufacturing base simply because it has always had one. It keeps that base by remaining competitive, investing in workers and making deliberate choices about what it buys.
Before buying your next car or truck, ask one straightforward question: Where was it built? If we want Americans to keep making things, Americans must keep buying the things Americans make.
Whenever possible, choose Made in USA.
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