Volkswagen’s Boardroom Checkmate: Blume’s Restructuring Rejected 12-7 as China Sales Tumble 26%

CEO Blume's restructuring plan rejected 12-7 by board as VW shares near 52-week low, China deliveries plunge 25.9%, and up to 120,000 jobs at risk.

When Volkswagen executives step up for Monday evening’s H1 pre-close conference call, they will face investors already rattled by a supervisory board that just delivered a stinging 12-7 vote against CEO Oliver Blume’s overhaul blueprint. The call, scheduled for 18:00, is meant to offer early financial colour on the first half of 2026, but the real drama lies in the widening rift between management, labour, and the board — all set against a deepening crisis in China.

The share price tells its own story. Volkswagen’s preferred stock ended Friday at €71.06, a mere 2.69% above the 52-week low of €69.20 touched on 1 July. The stock has lost 5.81% in a single week and 20.07% over the past month, while the year-to-date decline stands at 33.03%. From the December 2025 high of €109.10, the equity has shed 34.87%. Technical indicators paint a bleak picture: the relative strength index sits at 30.2, flirting with oversold territory, and annualised 30-day volatility has climbed to 32.21%. The shares trade 15.51% below their 50-day moving average and 24.22% beneath the 200-day line of €93.78.

Blume’s boardroom defeat follows months of wrangling over cost cuts. The proposed restructuring included reducing product complexity, paring production capacity, and — crucially — avoiding outright plant closures. Blume told Bild am Sonntag that “there are more intelligent solutions than closing plants,” pointing to a 20% reduction in factory costs in Germany last year. Nevertheless, four German sites — Hannover, Emden, Zwickau and Neckarsulm — remain under close watch, with media reports suggesting up to 120,000 jobs could be cut globally (some sources put the figure at 100,000). The model range would be slashed by half, variant numbers reduced by 75%, and annual production capacity trimmed from 10 million to 9 million vehicles.

The numbers behind the struggle are stark. Volkswagen delivered 4.13 million vehicles worldwide in the first half of 2026, a decline of 6.3% year-on-year. China, once the group’s profit engine, saw deliveries plunge 25.9% to 973,000 units. Europe offered some respite, with sales rising 3.5% to 2.04 million, while battery-electric vehicle deliveries in the region grew 8.4% to 377,000 units. For the second quarter alone, global deliveries totalled 2.08 million, down 9% from a year earlier. Analyst Frank Schwope put the China drop at an even steeper 37% for the quarter. The financial bleeding is evident: net profit in the first quarter tumbled 28% to €1.56 billion, revenue slipped 2.5% to €75.7 billion, and operating margins more than halved between 2021 and 2025.

Not all electric news is gloomy. Volkswagen reported that orders for fully electric vehicles in Europe surged more than 50% in the first half, while the new ID. Polo, together with the Skoda Epiq and Cupra Raval, racked up over 54,000 orders. Plug-in hybrids and range-extender models also jumped 27% to 246,000 deliveries. But the broader margin pressure remains intense.

Labour relations have soured sharply. The works council accused Blume of creating confusion rather than clarity, saying his public remarks “only make things worse.” The body, representing more than 40,000 workers at five plants — including Osnabrück in addition to the four at-risk sites — spoke of a loss of trust in the CEO and announced factory meetings after the summer break. The IG Metall union had already protested on 10 July. A taz commentary called Blume’s “more intelligent solutions” rhetoric audacious, floating alternative scenarios such as switching production to defence equipment or assembling Chinese-developed VW models.

Jefferies analysts remain sceptical about the restructuring’s progress, noting that on key sticking points — plant closures or additional job cuts — there are no clear advances. The pre-close call tonight is expected to offer first financial indications for the second quarter, but the real reckoning comes on 24 July, when Volkswagen publishes full second-quarter results and must demonstrate how — or whether — its cost programme can overcome internal resistance and a shrinking Chinese market.