Volkswagen Braces for a Boardroom Battle as July 9 Showdown Nears

Tensions inside Volkswagen are reaching a boiling point ahead of a crucial supervisory board meeting scheduled for July 9. CEO Oliver Blume is reportedly ready to escalate his restructuring push, even if that means sidestepping the veto powers held by the company’s powerful works council and the state of Lower Saxony, which owns a 20% stake and a blocking minority.

Key to Blume’s strategy is a dramatic expansion of the cost-cutting programme. Sources say management is weighing the closure of plants in Hannover, Emden, Zwickau and Neckarsulm — a move that would hit thousands of jobs across the brand’s heartland. The cuts do not stop there. Internal figures circulating at Wolfsburg suggest the group could shed up to 100,000 positions worldwide by 2035, far more than the 50,000 reduction already agreed. An additional 20,000 to 30,000 jobs are also under review, with the struggling core Volkswagen passenger-car brand bearing the brunt.

To get past the obstructive block in the boardroom, the executive board is exploring structural workarounds. One option involves spinning off the core VW brand and the components division into separate legal entities. Such a move could effectively bypass the special co-determination rights enshrined in the so-called Volkswagen Act, which gives Lower Saxony an effective veto over major decisions. Should the supervisory board reject the savings package on July 9, Blume has threatened to call an extraordinary general meeting as early as August, appealing directly to shareholders to apply pressure on labour representatives and the state. Together, the works council and Lower Saxony control 12 of the 20 board votes.

Resistance from the workforce is already stiff. The works council sent the board a list of 86 questions back in late May, and a 43-page management response arrived without concrete numbers on job losses. Both IG Metall and the council have vowed to fight any plant closures. Political opposition is also mounting: Hesse’s economy minister, Kaweh Mansoori, has demanded transparent dialogue, especially regarding the Kassel-Baunatal plant, which employs around 15,000 people. Lower Saxony itself has categorically rejected any factory shut-downs.

Financially, the automaker is under severe strain. Volkswagen’s stock recently touched a 16-year low of about €72.54, giving the entire group a market capitalisation of roughly €37.6 billion. Analysts at Citi have pointed out that this sum is less than the estimated €44 billion value of the majority stakes VW already holds in Porsche and its truck holding Traton. To raise cash, management is weighing the sale of non-core assets including Ducati and Europcar, and may also cut its Traton stake to 75% — though concrete decisions on all these measures are expected only after the July 9 board meeting.

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