Tensions are running high as Volkswagen prepares for its upcoming board meeting, with CEO Oliver Blume at odds with two key stakeholder groups over proposed massive cuts as part of a sweeping 40-point restructuring plan.
The details: Opposition to Blume’s proposal to cut 50,000 jobs has become one of the most contentious elements of the CEO’s turnaround plans for the German automaker as the parties prepare for the September 4 board meeting, according to Reuters.
Blume has said the cuts could be essential for Volkswagen Group to remain viable amid industry headwinds and growing competition.
Labor representatives and major shareholder Lower Saxony are proposing alternative plans, with tensions between the CEO and labor intensifying.
What they’re saying: "Our trust in this company's executive board, and especially in its CEO Oliver Blume, has been damaged. Not yet beyond repair, but damaged nonetheless," said Volkswagen labor leader Daniela Cavallo, according to excerpts of her speech shared by the works council, per Reuters.
Why it matters: The outcome of Volkswagen’s restructuring battle could determine how aggressively the automaker can cut costs and redirect resources toward future products and technology, making the board’s decisions important for dealers relying on the brand to remain competitive and maintain a strong product pipeline.
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Between the lines: Amid the tension between Blume and Volkswagen stakeholders, one thing is clear—the company is in dire need of a turnaround strategy, with profit margins under pressure and the group’s overall sales still sliding.
Take a look at the numbers…
Since 2021, VW’s margins have decreased from 7.7% to 2.8% in 2025, with a slight increase to 3.8% in the first half of 2026, while rivals Ford and GM have begun recovering toward their 2021 levels.
Volkswagen's second-quarter net profit fell 33% from a year earlier to €1.54 billion ($1.8 billion).
Volkswagen’s U.S. sales rose 24.9% year over year in the second quarter, while the group’s premium and performance brands Audi and Porsche fell 17% and 16%, respectively, year to date.
If the 40-point turnaround plan is rejected at the Sept. 4 meeting, as it was at a board meeting in July, Volkswagen management could take an unprecedented step and call a shareholder meeting as early as October and put the turnaround strategy directly to investors, per inside sources, according to Reuters.
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