Volkswagen’s Leadership Turmoil and Cost-Cutting Clash Loom Over Critical Earnings Report
Published on 07/18/2026 at 14:41 | Redaktion boerse-global.de
The boardroom battle at Volkswagen has escalated on multiple fronts, leaving the carmaker’s restructuring plan in limbo just days before it is due to release half-year results. A failed attempt to install a new human resources chief, a board vote against closing four German plants, and an intensifying dispute with labour unions have converged to create an unusually volatile environment for the group’s preferred shares, which closed at €73.12 on Friday — down 29.79% since the start of the year and roughly 33% below the 52-week high of €109.10 set in December.
Chief executive Oliver Blume, in an internal memo to staff, has flagged the potential elimination of 50,000 jobs worldwide to close a cost disadvantage of around 20% versus rivals. The move follows the supervisory board’s rejection earlier this month of management’s plan to shutter plants in Emden, Hanover, Zwickau and Neckarsulm, a vote that passed 12 to 7. With factory closures off the table for now, the burden of savings has shifted squarely onto headcount reduction. Yet the personnel front is itself mired in confusion: the appointment of Bosch manager Erika Rasch as the new labour director stalled after the worker side of the board conditioned its approval on the creation of a separate technology portfolio — a demand management has not yet met.
The IG Metall union has responded to the sparring by threatening a “hot autumn” of protests against what it warns could be as many as 100,000 job losses, a figure far higher than the 50,000 mentioned by Blume. The German Bundestag recently held an urgent debate on the automotive industry, with lawmakers describing the situation at Volkswagen as “bitterly serious” and discussing reforms to safeguard the country’s industrial base.
Should investors sell immediately? Or is it worth buying Volkswagen?
Compounding the internal strife, Volkswagen’s operating performance is under severe pressure, particularly in China. Worldwide deliveries in the second quarter fell 8.6% to 2.08 million vehicles, but the decline was far steeper in the group’s most important single market: Chinese deliveries tumbled 36.6% to 424,300 units. China had been a reliable profit engine for years, and its sudden deterioration is squeezing margins at the very moment the group needs to fund its electrification push and the restructuring of its German factories.
On the product side, Volkswagen is pressing ahead with new models. Mid-July saw the unveiling of the ID. Cross, an electric SUV built on the MEB+ platform, with a market launch scheduled for late 2026. The company also confirmed that it has signed an exclusive agreement to sell a 51% controlling stake in its subsidiary Everllence to Bain Capital, retaining a 49% holding — a partial exit that signals a shift in portfolio strategy.
Despite the headwinds, several analysts see value in the stock at current levels. JPMorgan’s Jose M. Asumendi reiterated a “Neutral” rating on July 14 with a price target of €110, citing a 12% year-to-date increase in the order backlog. Deutsche Bank Research maintained a “Buy” rating on July 16. Bankhaus Metzler went further, raising its price target from €105 to €130 in early July while keeping a “Buy” recommendation. All three targets sit well above the current share price, suggesting the market is pricing in more distress than the underlying asset base may warrant.
Volkswagen’s full-year guidance remains intact: revenue growth of 0–3% from the 2025 base of €321.9 billion and an operating margin of 4.0–5.5%. Investors will get their first detailed look at first-half performance on July 24, when the group publishes its interim report. The numbers will show whether the margin band is achievable given the China slump and the mounting cost of the restructuring battle — and whether the board can resolve the deadlock over both the HR appointment and the technology portfolio before autumn’s labour unrest heats up.
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