Volkswagen's Boardroom Rebellion Blocks Blume's Radical Overhaul, Sending Shares to the Brink

Volkswagen's supervisory board voted 12-7 against CEO Oliver Blume's sweeping restructuring plan, leaving the turnaround in limbo and the stock down 33% YTD amid job cut fears and a steep sales decline in China.

Oliver Blume's ambition to push through the most sweeping restructuring in Volkswagen's history has hit a wall. The supervisory board voted 12-7 against his "Zukunftsplan" on July 10, 2026, with labour representatives and the state of Lower Saxony — the group's second-largest shareholder behind the Porsche-Piëch family — lining up in opposition. The defeat leaves the carmaker's turnaround strategy in limbo and the stock clinging to levels just 2.69% above its 52-week low of €69.20, reached on July 1.

The preferential shares closed Friday at €71.06, down 1.31% on the day. That extends a year-to-date slide of 33.03% — a descent that has wiped out roughly a third of shareholder value since December 2025, when the stock hit a high of €109.10. The gap to that peak now stands at 34.87%, and the shares trade well below both the 50-day moving average (15.51% under) and the 200-day line (24.22% below). The relative strength index of 30.2 signals oversold conditions, while 30-day annualized volatility of 32.21% points to continued heavy swings.

The plan Blume had put forward was nothing short of radical. Reports suggested up to 120,000 jobs could be affected — including 50,000 already announced layoffs and an additional 70,000 by 2030 — with four German plants at risk: Hannover, Emden, Zwickau and Neckarsulm, and in some reports Osnabrück. The production capacity target was to be cut to 9 million vehicles per year, building on an earlier reduction to 10 million, while the model lineup would be slashed by up to half and variant complexity by 75%. Models such as the Skoda Fabia, VW Jetta and Porsche Taycan would be phased out. Finance chief Antlitz had previously described the cost savings achieved so far as insufficient.

Blume's efforts to soothe the workforce after the board's rebuff have only deepened tensions. Two days after the vote, he told Bild am Sonntag that "more intelligent solutions" than factory closures exist, pointing to a 20% reduction in plant costs in Germany over the past year. But the works council is furious, accusing him of letting a self-imposed deadline slip and communicating through press interviews rather than directly. Town hall meetings at the affected sites are scheduled for early August, after the summer break. The supervisory board itself does not meet again formally until December 2026, so the question of plant closures remains officially unresolved — though Blume has not ruled them out entirely over the longer term.

Underpinning the urgency is a sharp operational deterioration. Global sales in the second quarter of 2026 fell to 2.08 million vehicles, down roughly 8.6-9% year-on-year. The China business was the biggest drag: deliveries there cratered 36.6% to 424,300 units. In the first quarter, net profit had already plunged 28% to €1.56 billion on revenue of €75.7 billion, a 2.5% decline. A bright spot came from the disposal of a majority stake in Everllence, which generated €7.4 billion in proceeds to bolster the balance sheet.

There are, however, glimmers of hope on the electric front. The new ID. Polo — part of the Electric Urban Car Family that also includes the Škoda Epiq and CUPRA Raval — sold more than 50,000 units in its first four weeks. Combined orders for the three models now exceed 54,000 even though only two of the four variants are available. Volkswagen remained Europe's BEV leader in the first half, with 377,000 electric vehicles sold, and overall EV orders in the region jumped more than 50% in the second quarter. Still, Lower Saxony's premier Olaf Lies reiterated that plant closures are not a viable strategy.

Blume insists the transformation will proceed regardless. Some measures, such as halving the model portfolio to 73 vehicles, can be enacted without board approval. But plant shutdowns and major job cuts require a green light from the supervisory board. One potential escape route being discussed is an extraordinary general meeting, which German company law permits if the situation threatens the company's existence. After the summer break, a revised version of the Zukunftsplan could come up for another vote — but whether it can command a majority this time remains anyone's guess. For now, the stock is pricing in maximum uncertainty.