I’ve been saying for years that Germany was committing financial suicide. Folks thought Germany’s manufacturing base was untouchable. They believed German engineering alone would overcome each political mistake. That was all the time nonsense. No firm, regardless of how nice, can survive if politicians intentionally make it unattainable to provide competitively.
Now even Volkswagen is admitting actuality. Reuters stories the corporate is contemplating slicing 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 1000’s of positions had already been focused. When the most important industrial firm in Germany begins speaking about survival as an alternative of enlargement, you understand one thing is essentially incorrect.
Politicians will blame China, whereas others will blame Donald Trump or tariffs. They all the time want another person responsible as a result of admitting failure would imply admitting their very own insurance policies destroyed German trade.
Germany shut down nuclear energy. Power costs exploded. Brussels piled regulation upon regulation onto producers whereas demanding unattainable local weather targets. Then governments pressured corporations to pour billions into electrical automobiles lengthy earlier than customers had 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 vehicles for that matter. The common German, a citizen of the EU financial powerhouse, now has a decrease internet price than among the Southern European nations.
Volkswagen Group delivered 8.98 million automobiles globally in 2025, basically flat from the earlier yr, however appearances could be deceiving. Working revenue collapsed by greater than 53%, falling from €19.1 billion to only €8.9 billion, though 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 possibly can hold promoting vehicles, however ultimately the income disappear, and as soon as that occurs, the layoffs all the time comply with.
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 inexpensive vitality mixed with world-class manufacturing. When you destroy that system, 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 are going to condemn Chinese language imports a bit extra. None of that modifications the underlying drawback and governments can’t regulate prosperity into existence. They’ll solely spend borrowed cash pretending they’ve solved the disaster.
Volkswagen is collapsing as a result of politicians forgot how economies truly 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 consider they know higher than markets. Our pc has been warning that Europe faces a chronic financial decline whereas capital continues searching for 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.
