Dividend Amid Despair: Volkswagen Board Divided Over Existential Threat as Profits Plunge 28%
Published on 06/18/2026 at 06:13 | Redaktion boerse-global.de
Volkswagen's annual shareholder meeting this week laid bare a board deeply fractured over the company's future direction. While the nine-member executive board is united in its bleak assessment, there is no consensus on how to steer the group out of the crisis.
An internal survey presented to the supervisory board in April 2026 found that six of the nine Vorstand members consider the company's situation existential. The remaining three described it as tense. None rated the outlook as unproblematic. The traditional business model — engineering in Germany, production in Europe for a global market — is widely seen inside the board as no longer viable. Strategies for China and North America were also judged unsustainable. But on concrete restructuring plans, the board remains split.
The financial toll is stark. In the first quarter, profit tumbled 28.4 percent to €1.564 billion. That follows a 44 percent drop in the full-year figure for 2025, which fell to €6.9 billion. Despite those numbers, the board has proposed a dividend of €5.20 per ordinary share, a total payout of roughly €2.6 billion. That has drawn sharp criticism from groups such as the BUND and the Kritische Aktionäre, who argue the money should instead fund investment in small electric cars built at European factories.
Asset managers Deka and Union Investment have warned that cost-cutting alone will not solve the problem. Volkswagen has already reduced factory-level costs in Germany by more than 20 percent, but that is not enough to reach the target operating margin of 8 to 10 percent. The company must slash complexity and focus on high-margin products, they argue, or the decline will accelerate.
The workforce is bearing the brunt of the austerity. By the end of 2026, 19,000 jobs are to be eliminated. The cumulative target for 2030 is 35,000 — of which 28,000 positions are already contractually agreed. At subsidiaries Porsche and Audi, an additional 15,000 roles are under review. German plants are under particular threat. Board discussions have touched on closing sites in Emden, Zwickau, Hanover and Neckarsulm. The Osnabrück plant, which has already scaled back production of the T-Roc Cabrio, has no confirmed future beyond 2027. Management is in talks with arms manufacturers about alternative use of the site.
IG Metall and the works council have vowed to resist any plant closures, demanding viable plans for the affected regions instead of shutdowns.
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