Labour Trust Falters at Volkswagen as Blume’s Board Defeat and China Slump Weigh on Shares
Published on 07/12/2026 at 13:26 | Redaktion boerse-global.de
The internal conflict at Volkswagen has taken a bitter new turn, with the company’s works council accusing chief executive Oliver Blume of a serious breach of trust. Union representatives claim that management had concrete plans for plant closures and job cuts in Germany while deliberately withholding those details from the workforce. The accusation came after a Friday evening ultimatum — in which labour leaders demanded clarity on rumours of up to 100,000 job losses — passed without the requested response from the board.
The works council’s anger is the latest flashpoint in a struggle that erupted earlier this month when the supervisory board rejected Blume’s flagship cost-cutting programme. At a July 9 meeting, only seven of the 19 members present voted in favour of the “Zukunftsplan 2030”, with worker representatives and the state of Lower Saxony voting as a bloc against it. The plan had envisioned the possible closure of up to four German plants — Zwickau, Emden, Neckarsulm and Hannover, which together employ roughly 40,000 people — alongside a global workforce reduction of up to 120,000 positions, 50,000 of which had already been approved.
Blume pushed back in an interview published on Sunday, telling Bild am Sonntag that “there are smarter solutions than closing plants”. He pointed to progress already made: factory costs in Germany fell by 20 percent in 2025, and the new ID.Polo has sold more than 50,000 units in its first four weeks on the market. The “smarter” approach, he argued, would hinge on process optimisation, artificial intelligence, automation and retraining staff rather than shuttering facilities. Separately, the group continues to pursue a sweeping rationalisation of its model lineup: by 2035 the number of nameplates is set to be halved, complexity reduced by as much as 75 percent, and annual production capacity cut by one million vehicles to nine million by 2030. Around 5,000 management roles are also expected to disappear by the end of the decade, all in service of a targeted operating margin of 8 to 10 percent.
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The urgency behind the restructuring stems from a sharp deterioration in the company’s business, particularly in China. Volkswagen’s deliveries in the country plunged 36.6 percent in the second quarter of 2026, while the first-half drop reached 26.1 percent — the lowest China sales figure since 2010. Although the broader Chinese electric-vehicle market grew by 14 percent over the period, Volkswagen lost ground to domestic rivals. Group-wide, global deliveries in the second quarter fell 8.6 percent to approximately 2.08 million vehicles. In the United States, Volkswagen’s battery-electric vehicle sales halved in the first half, slumping 68.8 percent, a decline the company partly attributes to the expiry of government incentives.
The market’s response to the turmoil has been stark. Volkswagen’s preferred shares closed at €71.06 on Friday, down 1.31 percent on the day, deepening the weekly loss to 5.25 percent and the monthly decline to 17.85 percent. The stock has shed 33.03 percent since the start of the year and trades 24.45 percent below its level of twelve months ago. At a distance of just 2.69 percent from its 52-week low of €69.20 — hit only on July 1 — the shares are uncomfortably close to fresh troughs. The 50-day moving average of €84.11 lies 15.51 percent above the current price, while the 200-day average of €93.78 is 24.22 percent higher. The relative strength index of 30.2 points to an oversold condition, and the annualised 30-day volatility of 32.21 percent underscores elevated investor anxiety. The company’s market capitalisation stands at €32.75 billion.
Investors now face a week heavy with potential catalysts. On Monday, July 13, Volkswagen holds its first-half pre-close call between 9:00 and 10:00 CET. Analysts expect management to address margin and cash flow for the period, but questions about the cost structure and the China strategy are likely to dominate. The full half-year report is due on July 24. Whether Blume can repair his relationship with the works council and forge a consensus with the supervisory board remains the central unknown. If the stock breaks below the €69.20 low, technical selling could accelerate, adding to the pressure on a leadership already fighting on two fronts.
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