Lower Saxony Premier Balances VW Cuts Against Rising AfD Threat

Volkswagen's sweeping restructuring has placed the premier of Lower Saxony in a delicate position: endorsing deep job cuts at the carmaker while working to prevent the far-right Alternative fuer Deutschland (AfD) from gaining ground in a state that is both home to Volkswagen's headquarters and a key shareholder in the company.

Olaf Lies, who leads the state's co-ruling Social Democratic party and sits on Volkswagen's supervisory board, dropped his opposition to a restructuring plan at a board meeting last week. The plan could result in well over 100,000 layoffs across the group as it confronts competition from China and U.S. tariffs. Lies argued that failing to reach a deal with management could have put the carmaker in an even more precarious position than the painful cuts themselves.

Lower Saxony is one of the few German states where the AfD has not yet overtaken the SPD in polls, but the gap is narrowing. The party's momentum has heightened fears among mainstream parties that voters may switch allegiance, particularly at Volkswagen locations. "We have to convey the certainty that we can solve these problems. Otherwise, extremist forces will get a boost," Lies said, defending his dual role against critics who contend that political influence impedes Volkswagen's ability to act.

The AfD attributes the woes of Germany's auto industry largely to political interference, citing the European Union's 2035 combustion engine phase-out — a target that top auto executives and mainstream politicians have also criticised. After a historic election victory in neighbouring Saxony-Anhalt, the AfD is aiming for gains in Lower Saxony this weekend and in next year's state election.

Sebastian Lechner, state leader for the opposition conservative CDU, said there is concern that uncertainty among employees will benefit the AfD in the local elections, especially at Volkswagen sites. Ansgar Schledde, who leads the AfD's state faction, called the job cuts and structural review "a catastrophe for tens of thousands of families" and said Lies "didn't fix the problem." The AfD is also a vocal critic of IG Metall, Germany's main industrial union, whose top members sit on the supervisory board alongside the state and representatives of Volkswagen's controlling Porsche and Piech families.

The restructuring deal averted a more radical overhaul that could have sidelined the state's influence entirely. Lies said it bought time to find alternatives for the four Volkswagen plants threatened with closure in the 2030s. Lower Saxony holds a 20% stake in Volkswagen and appoints two members to the 20-member supervisory board, typically the head of government and another minister.

The carmaker's Emden factory lies in the premier's home region on Germany's northwestern coast, while Zwickau — another EV-only plant at risk — is almost 500 km southeast in Saxony, whose state government does not share the same shareholder status.

Ingo Speich of Volkswagen shareholder Deka Investment said politicians on the board risk conflicts of interest and may lack the time and attention needed to steer a major company through a crisis. Automotive analyst Stefan Bratzel said he expects at least two of the four plants to close, with difficult discussions likely to extend into next year's election campaign. "There are conflicting aims here — that's perfectly clear," Bratzel said of Lies' dual role. "The real conflicts are just beginning." He added that the AfD did not give a good impression regarding the future of the auto industry, saying the party is stuck in the past and believes jobs can be saved by combustion engines and the old world of automaking.