Volkswagen’s €7.4 Billion Breather Fails to Break Board Deadlock as Shares Near Yearly Low

Volkswagen's stock slides after supervisory board rejects CEO Blume's cost-cutting plan; union deadline looms as job cuts of up to 120,000 are discussed.

Volkswagen is staring down a fresh crisis on multiple fronts. A union-imposed deadline for CEO Oliver Blume to disclose the scope of planned job cuts expires today, just hours after the company’s supervisory board blocked the sweeping restructuring plan he had put before it. The stock, already under pressure from weak China sales, slid a further 2.38 percent on Friday to €70.58, inching closer to its 52-week low of €69.20 set earlier this month.

The shares have now lost more than a third of their value since the start of the year, and at roughly €84.10 for the 50-day moving average, they are trading more than 16 percent below that benchmark. A technical gauge, the relative strength index, has fallen to 29.5, indicating an oversold condition — though analysts caution that sentiment remains fragile until the political standoff inside the company is resolved.

Blueprint Stalls in the Boardroom

The impasse came to a head on Thursday evening when the supervisory board voted 12 to 7 against endorsing the cost-cutting package that Blume had presented. Worker representatives, who hold half the seats, refused to green-light any concrete plant closures or headcount reductions. Internal planning documents, according to sources cited by the works council, envision cutting as many as 120,000 positions — a figure that media reports had earlier put at up to 100,000. The carmaker’s German sites in Emden, Hanover, Zwickau and Neckarsulm are seen as most vulnerable.

The blocked plan, dubbed “Zukunftsplan 2030,” is designed to slim down an operation that has grown unwieldy during two decades of expansion. Volkswagen currently builds around 150 different models globally. Under the blueprint, that number would be roughly halved to about 75 core vehicles by 2030, with a separate target of reaching that level outside China by 2035. The variety of trim levels would be slashed by up to 75 percent, while annual production capacity would be cut from 12 million vehicles to nine million. Capital expenditure for the 2027–2031 period would drop to €135 billion from a previously planned €180 billion.

Everllence Sale Provides Cash — But Not Enough

To help fund the transition, Volkswagen has lined up the sale of a 51 percent stake in its battery subsidiary Everllence to the private equity firm Bain Capital. The deal is expected to close by the end of 2026, subject to regulatory clearance and approval from French labor representatives, and would inject €7.4 billion into the company’s coffers.

Chief Financial Officer Arno Antlitz was quick to temper expectations, however, stressing that the Everllence proceeds alone cannot fix the structural problems in the core automotive business. “A hard restructuring of the parent company remains unavoidable,” he has said. The message underscores the depth of the challenge: even a multibillion-euro infusion has done little to calm investor nerves.

Strikes Spread as Labor Digs In

The board’s rejection has fuelled already simmering anger on the factory floor. IG Metall, Germany’s largest industrial union, has organised nationwide protests. In Emden alone, about 1,500 workers took to the streets, while in Wolfsburg the turnout was around 500. The state of Lower Saxony, which holds a 20 percent stake in Volkswagen, has categorically opposed any plant closures, further complicating the path ahead.

Works council chairwoman Daniela Cavallo issued the ultimatum that expires today, demanding that Blume provide a clear and public statement on the job-cut plans that have been leaked to the press. If he fails to respond, she has warned of extraordinary worker assemblies after the summer break.

China Drags Down Global Delivery Numbers

The urgency of the restructuring is underlined by the latest sales figures. Volkswagen delivered about 4.13 million vehicles worldwide in the first half of 2026, a decline of 6 percent from the 4.41 million units it shifted a year earlier. The main culprit is China, where second-quarter sales collapsed by more than a third to just 424,300 vehicles.

Other regions offered some solace. Western Europe saw a modest 2 percent uptick to roughly 900,000 deliveries, and North America jumped almost 8 percent to 242,000 units. The electric-vehicle segment in Europe showed particular strength: the order book rose more than 50 percent compared with the end of 2025, lifted by the new “Electric Urban Car Family.”

By contrast, the Porsche brand, which is part of the broader Volkswagen group, suffered a 16 percent drop in first-half sales to 122,306 vehicles, adding to the pressure on management to act quickly.

What Comes Next

The management board is now expected to work out the detailed cost-saving measures after the summer parliamentary recess, with the next regular supervisory board meeting scheduled for September. Until then, the company remains in a state of suspended animation. JPMorgan kept its “neutral” rating on the stock with a price target of €110, noting that the focus on cost discipline is correct. UBS, however, warned that provisions for the restructuring could trigger profit warnings.

Friday’s expiry of the union ultimatum may force Blume’s hand. For the moment, the shares are caught between a near-term technical oversold signal and a fundamental uncertainty that shows no sign of lifting.