Volkswagen's Two-Front War: Blume Fights State Law While Confronting 100,000 Job Cuts
Veröffentlicht: 07.07.2026 um 16:56 Uhr, Redaktion boerse-global.de
The arithmetic that has Volkswagen's market capitalisation lagging the value of its own holdings is driving the biggest internal battle the carmaker has seen in decades. Analysts at Citi estimate that VW's majority stakes in Porsche and Traton alone are worth roughly €44 billion. Yet the entire group trades at just under €38 billion on the Frankfurt exchange — meaning the core brand and its component operations are effectively being priced at zero. That valuation anomaly is the engine behind CEO Oliver Blume's push to strip away a state veto law that has protected the company from deep restructuring for decades.
Blume wants to hive off the Volkswagen core brand and the components division into separate legal entities. Doing so would bypass the historic Volkswagen Law, which grants the state of Lower Saxony — holder of 20% of voting shares — a de facto blocking minority. Under the current rules, important shareholder resolutions require a four-fifths majority, and plant closures need two-thirds approval from the supervisory board. Those barriers have repeatedly frustrated management's cost-cutting efforts. By spinning off the divisions, the CEO would effectively neuter the state's veto power without having to repeal the law.
That political confrontation is unfolding alongside a far more painful one. Reports from German media suggest that up to 100,000 jobs are now on the line globally — double the figure previously mentioned — and that four entire plants could be shuttered. Even Porsche, traditionally the group's profit powerhouse, is planning to cut around 4,000 roles in administration and development after its operating profit collapsed from €5.6 billion to a fraction of that level. The scale of the cuts has prompted IG Metall to call a company-wide day of action on the same day the supervisory board meets.
Should investors sell immediately? Or is it worth buying Volkswagen?
The supervisory board gathering on July 9 is shaping up as a pivotal moment. Management is expected to present a sweeping savings programme, but the UBS analyst Patrick Hummel has already warned that a profit warning is imminent, potentially in the mid-to-high single-digit billions of euros. Such a shortfall would further strain the group's already fragile balance sheet and add urgency to the restructuring push. The board's decision — whether to approve the spin-off plan and the associated cost measures — will set the stage for what promises to be a long political tug-of-war with the state government.
The root cause of the crisis is Volkswagen's deteriorating position in China, its most important market. An aggressive price war and weak electric-vehicle sales have squeezed margins so hard that even long-standing VW dealers are now adding rival brands to their showrooms to spread risk. The loss of momentum in China has cascaded through the group, forcing the board to contemplate cuts that would have been unthinkable a few years ago.
The market's reaction to all this uncertainty has been volatile. After closing at €75.62 on Monday, the shares edged up to €76.26 — still a year-to-date decline of roughly 28% to 29%. The stock has repeatedly brushed against its 52-week low of €69.20. Technically, the picture is weak: the price trades about 11% below its 50-day moving average and nearly 19% below its 200-day line. The relative strength index has oscillated between 37.7 and 39.7 in recent sessions, indicating oversold conditions that typically offer little support without positive operational news. Annualised volatility over the past month has hovered around 31% to 32%.
Some market watchers caution that a clean break is unlikely. Political compromise remains the more probable outcome, given that Lower Saxony will not surrender its influence willingly. But with Blume determined to unlock shareholder value and the board facing a looming profit warning and a jobs crisis, the July 9 meeting could mark the beginning of a transformation that reshapes Volkswagen for years to come — even if it also ensures a prolonged and bitter struggle ahead.
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