The far-right Alternative for Germany is blaming the government of Chancellor Friedrich Merz and the EU for VW’s difficulties.
BRUSSELS — Volkswagen’s growing crisis — with the company on Thursday approving 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.
“The end of traditional German car plants is the result of a failed economic and energy policy,” Tino Chrupalla, AfD’s federal spokesperson, said in a statement, putting the blame on the coalition government led by Chancellor Friedrich Merz.
VW’s supervisory board on Thursday approved cost-cutting measures proposed by CEO Oliver Blume, agreeing to cut 50,000 jobs by 2030, to trim the company’s product line and to shutter four German factories, the company’s most radical domestic cutbacks.
Including 50,000 job losses previously agreed, the company would lose 100,000 positions.
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.
“The crisis at VW is affecting the mood across the whole country. VW embodies German social capitalism like no other company,” said Klaus Dörre, a German sociologist specializing in right-wing populism and industrial transitions.
Blume’s plan overcame dogged resistance from the government of Lower Saxony, where Volkswagen is headquartered and which holds seats on the board.
The powerful IG Metall union also agreed, despite earlier threats to oppose the measures.
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.
Political gain from business pain
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.
The EU plan has been unpopular with German voters since it was first proposed — and Merz also opposes it — but the AfD is leaning heavily into the 2035 legislation to show Brussels as being hostile to German industry and Merz as too feckless to block the measure.
“The one-sided and premature fixation on electromobility has led Germany’s key industry into a dead end,” Chrupalla said.
However, any changes to the EU’s rules will not fix Volkswagen’s real problem: China.
The country was once VW’s biggest and most profitable market, helping subsidize factories back home. The shift to electric vehicles and competition from Chinese automakers making very good cars at low prices have flipped the scales. VW’s China sales dropped 26 percent year-over-year in the first six months of this year.
The shift to electric cars is also endangering VW’s traditional dominance in combustion engines. VW and other European carmakers are scrambling to catch up to Chinese companies that have better EV technology and dominate the global battery market. They’re also grappling with high labor costs and with the enormous price tag of retooling their factories for EVs — something Blume is hoping to address with his reform plans.
But the AfD isn’t spending much time on the intricacies of China’s industrial rise. Instead, it’s pointing the finger at its political rivals.
The AfD is “skillfully exploiting” the threat of job cuts and factory closures “to blame the alleged ‘climate-driven planned economy’ for the crisis in the car industry and the entire economic model,” said Dörre. “This resonates well with sections of the working class, not least because they cannot afford an electric car themselves.”
However, Thursday’s agreement may come too late to slow a surging AfD in Saxony-Anhalt, where one poll by the INSA organization shows the party has the support of 43 percent of respondents, far ahead of the Christian Democrats with 22 percent and close to the level needed for an outright majority in the state parliament.
Romanus Otte contributed reporting from Berlin.
This article has been updated.