Automotive News Europe — 2026-08-28
Automotive Industry
Volkswagen Group’s internal battle over its turnaround plan comes to a head next week when CEO Oliver Blume tries to win supervisory board approval for a sweeping restructuring plan. If the plan is rejected, Blume may try to circumvent the board entirely by appealing directly to shareholders.
Much is at stake for the automaker, which owns the Audi, Porsche, Bentley and Skoda brands. The group is struggling to revive profits as it contends with U.S. tariffs, falling sales in China, costly overcapacity in Germany and intensifying competition from Asian rivals in Europe.
Blume has said VW is not able to finance its future business with its current low profitability. He aims to slash costs and lift margins to 9 percent. VW Group’s second-quarter margin was 4.2 percent.
Management, unions and Lower Saxony have each drawn up competing turnaround proposals.
Management wants to double job cuts to 100,000 from 50,000 previously agreed with unions, possibly close factories in Germany and spin off some company divisions, triggering labor representatives and the government of Lower Saxony to introduce their own plans, which essentially oppose layoffs and site shutdowns.
VW plants in Emden, Zwickau and Hanover, as well as Audi’s plant in Neckarsulm, are considered vulnerable because they lack a business plan beyond 2030.
The supervisory board, where labor representatives and Lower Saxony hold a majority, will convene Sept. 4 to vote on Blume’s plan.
VW plants in Emden, Zwickau and Hanover, as well as Audi’s plant in Neckarsulm, are considered vulnerable because they lack a business plan beyond 2030.
The supervisory board, where labor representatives and Lower Saxony hold a majority, will convene Sept. 4 to vote on Blume’s plan.
If the board rejects the 40-point plan again, as it did in July, management could call an extraordinary shareholder meeting as early as October and put the turnaround strategy directly to investors, people familiar with the matter said. Such a move would be highly unusual in Germany’s consensus-driven corporate culture.
The balance of power on VW’s supervisory board differs from its shareholder structure, creating a unique governance system that analysts have said slows down decision-making at Europe’s largest industrial company at a time of crisis.
On the 20-seat supervisory board, Lower Saxony and the works council hold a majority of 12 seats and can block any restructuring plan. Board members are personally liable when failing to act in the interest of the company.
At a general shareholder meeting, however, workers have no say and Lower Saxony has a 20 percent voting stake. The remaining 80 percent are held by Porsche SE, the investment vehicle of the Porsche and Piech families (53.3 percent), Qatar (17 percent), and other shareholders (9.7 percent).
That could leave VW within reach of a 75 percent majority usually needed for big structural decisions at listed companies in Germany, potentially breaking the impasse of continued resistance on the supervisory board.
Potential drawn-out legal dispute between stakeholders
It might not be so straightforward.
Under Germany’s so-called Volkswagen Law, major corporate actions such as business spin-offs typically require shareholder approval of more than 80 percent. While that gives Lower Saxony an effective blocking minority, VW’s management could invoke Article 111 of Germany’s Stock Corporation Act to circumvent the hurdle, the people familiar with the matter said.
The provision states that if management convenes an extraordinary shareholder meeting against the wishes of the supervisory board, any resolution at the extraordinary general meeting need only secure a three-quarters majority of votes cast. It also specifies that companies cannot impose stricter voting thresholds through their articles of association.
This could trigger a drawn-out legal dispute between stakeholders.
VW could also ask investors to vote separately on plans to eventually carve out its passenger-car and components divisions, the people said, as those proposals could face a higher risk of falling under the Volkswagen Law.
Talks are ongoing on a potential compromise.
The board’s executive committee, which includes VW’s works council chief Daniela Cavallo, Lower Saxony’s state premier Olaf Lies and members of the Porsche and Piech families, is set to convene on Sept. 3, a day ahead of the supervisory board meeting, to see where things stand.
Any compromise could center on the scale of job cuts and factory plans, two sources said, adding that the industry’s deepening crisis has made reaching an agreement more difficult.