Volkswagen at a Crossroads: UBS Sees Billions in Charges as Workers Mobilize Against Plant Closures
Published on 07/08/2026 at 19:43 | Redaktion boerse-global.de
The tensions simmering at Volkswagen are about to boil over. On Thursday, the company's supervisory board will convene for what is shaping up to be one of the most consequential meetings in recent memory, as the automaker pushes ahead with a sweeping restructuring plan that threatens up to 100,000 jobs worldwide and the shuttering of four German plants. Adding to the pressure, analysts at UBS have warned that a profit warning could be imminent, with restructuring charges likely to land in the mid-to-high single-digit billions and squeeze operating margins in the near term.
The stock market has already priced in the uncertainty. Shares of Volkswagen slid 4% to €72.74 in Xetra trading on the day of the board meeting, after having recovered slightly from a 52-week low of €69.20 hit on July 1. Year-to-date losses have widened to 31.44% from roughly 29.75% earlier in the week, reflecting the deepening gloom. The shares remain far below their 200-day moving average of €93.97, a gap of more than 22%, while the 50-day average of €84.72 also looms as a resistance level. The relative strength index has oscillated between 32.7 and 35.8, flirting with oversold territory yet failing to attract sustained buying interest in the absence of fundamental relief.
At the heart of the restructuring is the so-called "Zukunftsbild 2030" vision, under which Volkswagen aims to eliminate chronic overcapacity. European factories are currently running at an average of just 59% of capacity, and the company is targeting four sites in particular: Hannover, Emden, Zwickau and the Audi plant in Neckarsulm. Zwickau, where the automaker invested roughly €1.2 billion to build Germany's largest electric-vehicle plant, is considered most at risk, with 8,000 jobs hanging in the balance. IG Metall has called for nationwide protest actions on the day of the board meeting, vowing to resist any plant closures.
Parallel to the site-level debate, CEO Oliver Blume is reportedly exploring a deeper structural overhaul that could fundamentally alter the company's governance. Under his plans, the core Volkswagen brand and the components division would be spun off into separate legal entities, leaving Volkswagen AG as a pure holding company. The motivation is clear: to limit the influence of the so-called VW Law, which grants the state of Lower Saxony a 20% blocking minority and thus the ability to veto decisions on plant closures and employment levels. A holding structure would give the board more flexibility to adapt costs to the competitive pressure from Chinese automakers.
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The radical nature of the proposal has galvanized opposition. Labor representatives and IG Metall have already signaled they will fight any attempt to close the four plants. If the supervisory board rejects the executive board's plans, media reports suggest the next step could be an extraordinary general meeting where shareholders would vote directly on the savings package — a stark escalation that underscores how deeply the conflict runs.
Beyond the factory floor, Volkswagen is also streamlining its model lineup. Several well-known nameplates are set to be discontinued without replacement. The Touareg, the brand's flagship SUV, is no longer configurable, and a combustion-engine successor is considered unlikely. The T-Roc Cabrio, ID.5 and Taigo are all under review due to limited niche appeal. Meanwhile, production of the Golf Variant will shift entirely to Mexico, while the Wolfsburg plant will pivot toward the ID.3 and, from 2029, the electric Golf 9 — a lifeline that remains several years away.
Amid the upheaval, a surprising alternative has surfaced. VDA President Hildegard Müller has proposed opening German factories to Chinese manufacturers, and Blume is reportedly evaluating so-called CKD (completely knocked down) assembly, whereby Chinese EV models would be finished in Volkswagen plants. Such a move could boost capacity utilization and offer a way out for plants that can no longer operate profitably with in-house production. In Osnabrück, a separate plan hints at a partnership with defense contractors.
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The board meeting on Thursday is expected to clarify how seriously Volkswagen intends to pursue these options. If concrete plant closures are confirmed, the shares are likely to come under further pressure. But if the board blocks the plans, the resulting standoff between management and shareholders could set the stage for an extraordinary vote — adding yet another layer of risk to a company already navigating one of its most turbulent periods.
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