I’ve been saying for years that Germany was committing financial suicide. Individuals thought Germany’s manufacturing base was untouchable. They believed German engineering alone would overcome each political mistake. That was at all times nonsense. No firm, irrespective of how nice, can survive if politicians intentionally make it unimaginable to provide competitively.
Now even Volkswagen is admitting actuality. Reuters stories the corporate is contemplating chopping as much as 100,000 jobs over the approaching years whereas closing factories, decreasing funding, and restructuring components of the enterprise. This comes after tens of hundreds of positions had already been focused. When the most important industrial firm in Germany begins speaking about survival as a substitute of enlargement, you realize one thing is basically flawed.
Politicians will blame China, whereas others will blame Donald Trump or tariffs. They at all times want another person in charge as a result of admitting failure would imply admitting their very own insurance policies destroyed German business.
Germany shut down nuclear energy. Vitality costs exploded. Brussels piled regulation upon regulation onto producers whereas demanding unimaginable local weather targets. Then governments pressured corporations to pour billions into electrical automobiles lengthy earlier than shoppers have been prepared to purchase them. China developed far superior EVs at decrease costs, main the US and EU to all however ban them. The price of dwelling disaster has prohibited most from buying new automobiles for that matter. The common German, a citizen of the EU financial powerhouse, now has a decrease internet value than a few of the Southern European nations.
Volkswagen Group delivered 8.98 million automobiles globally in 2025, basically flat from the earlier yr, however appearances may be deceiving. Working revenue collapsed by greater than 53%, falling from €19.1 billion to only €8.9 billion, regardless that income held regular at roughly €322 billion. Gross sales in China and North America continued to weaken whereas tariffs, restructuring prices, and shrinking margins took their toll. Then the primary quarter of 2026 introduced one other warning, international deliveries fell one other 4%, together with a 15% decline in China and a 20.5% drop in the USA. That is precisely what occurs when prices proceed rising whereas demand weakens. You’ll be able to maintain promoting automobiles, however ultimately the income disappear, and as soon as that occurs, the layoffs at all times observe.
Volkswagen as soon as dominated China and was the crown jewel of Germany, the nation that occurred to be the financial powerhouse of the EU. Germany surrendered the very benefit that made it profitable, dependable and reasonably priced power mixed with world-class manufacturing. When you destroy that formulation, rebuilding it’s not so simple as reopening a manufacturing unit. China has even bid to purchase the shutdown VW factories inside Germany. The scenario is bleak at finest.
The unions will object to each layoff and politicians will promise one other rescue package deal. Maybe they may condemn Chinese language imports a bit extra. None of that modifications the underlying downside and governments can’t regulate prosperity into existence. They will solely spend borrowed cash pretending they’ve solved the disaster.
Volkswagen is collapsing as a result of politicians forgot how economies really perform. Germany was as soon as the financial locomotive pulling Europe ahead. Now it has change into the instance I level to when explaining what occurs after years of central planning, local weather hysteria, and bureaucrats who imagine they know higher than markets. Our pc has been warning that Europe faces a chronic financial decline whereas capital continues in search of security elsewhere. Volkswagen is solely confirming what the cycles have been projecting for years that factors at a downtrend not solely in Germany however within the EU as an entire.
