Volkswagen Faces Dual Crisis: Bosch Alliance Unravels as Restructuring Battle Intensifies
Published on 07/08/2026 at 17:24 | Redaktion boerse-global.de
Volkswagen is careering toward a pivotal boardroom confrontation that could reshape the company’s corporate structure, its workforce, and its technology strategy. At the heart of the standoff is chief executive Oliver Blume’s push to sideline the state of Lower Saxony’s veto power by turning the parent company into a pure holding, while simultaneously slashing up to 100,000 jobs and closing four German plants. The supervisory board meets on Thursday, 9 July 2026, to vote on a sweeping overhaul that has already drawn fierce opposition from labour representatives and sparked growing unease among investors.
The stakes were raised further this week by the quiet dissolution of the “Automated Driving Alliance” with supplier Bosch. Volkswagen and its software arm Cariad have prematurely ended the joint development of driver-assistance systems, a project that had absorbed an estimated €1.5 billion since 2022. Internally, the technology for highly automated functions is now considered uncompetitive, though Volkswagen intends to deploy some of the results—a new AI-based system for simpler driving features—in the planned ID.EVERY1 model due in 2027. The breakdown of the Bosch partnership is widely seen as an admission that Volkswagen’s in-house software drive under Blume has fallen short, forcing the group to lean more heavily on external partners such as Rivian and Mobileye.
Analysts at UBS have warned that the restructuring programme itself could trigger a substantial profit warning in the near term. The bank estimates that provisions for the job cuts and plant closures will run into the mid- to high-single-digit billions, a burden that would weigh heavily on operating margins. The share price already reflects deep scepticism on the market. After closing at €75.78 on Tuesday, the stock tumbled 3.43% to €73.18 on Wednesday, touching within 6% of its 52-week low of €69.20 reached on 1 July. By Thursday morning the shares had recovered slightly to around €74.54, but year-to-date losses still stand at 31% and the stock is trading more than 20% below its 200-day moving average of €93.97. The relative strength index (RSI) of 35.8 signals that the shares are hovering near oversold territory—yet without a fundamental catalyst, buyers have shown little urgency.
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The operational deterioration underpinning the crisis is stark. Volkswagen’s first-quarter 2026 net profit slumped 28% year-on-year to €1.56 billion, hammered by weak demand in China where local competitors such as BYD continue to steal market share with increasingly sophisticated offerings. The four plants now at risk of closure—Hannover, Zwickau, Emden, and the Audi site in Neckarsulm—would be the most visible casualties of a new €130 billion investment plan that Volkswagen wants to cut by roughly 15% over the next five years.
Blume’s holding-model proposal is a direct challenge to the so-called Volkswagen Law, which grants Lower Saxony a 20% blocking minority that has historically been used to protect jobs and plants. By spinning off the core Volkswagen brand and the components division into separate legal entities, the executive board hopes to insulate operational decisions from political interference and gain the flexibility needed to adapt to brutal competition from China. The plan has already drawn threats of nationwide protests from IG Metall and the works council, and the supervisory board meeting is expected to be accompanied by coordinated action days across the group’s German sites. If the board rejects the restructuring package, media reports suggest that management could call an extraordinary general meeting, forcing shareholders to decide directly on the austerity plan—a step that would escalate the conflict to a new level.
Thursday’s vote will therefore determine more than just job numbers. It will test whether Blume can push through the most radical transformation in Volkswagen’s post-war history against a wall of political and union opposition, and whether investors have the stomach for the billions in charges that lie ahead. Either way, a profit warning from UBS’s perspective is all but certain, and the path from that warning to a sustainable recovery remains anything but clear.
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