Volkswagen’s Leadership Void and Labour Ultimatum Exacerbate Investor Jitters Before Earnings
Published on 07/18/2026 at 17:42 | Redaktion boerse-global.de
Volkswagen’s preferred shares ended the week at €73.12, a decline of 0.52% on the day, leaving the stock more than 29% lower since the start of the year. The equity now trades just 5% above its 52-week low of early July — a level that reflects the deepening turmoil inside the German automotive giant. Two distinct but interconnected crises are driving the sell-off: a boardroom deadlock over key executive appointments and a full-blown confrontation with the works council that will force Chief Executive Oliver Blume to confront thousands of employees face-to-face later this month.
The works council has scheduled extraordinary meetings for 25 and 26 August at Volkswagen’s plants in Wolfsburg, Zwickau and Emden. Blume, accompanied by brand chief Thomas Schäfer, will be required to answer questions from the workforce. The council accuses management of withholding vital information about the company’s future strategy, and its decision to escalate the matter publicly follows a lapsed ultimatum demanding that Blume address employees directly. In an internal message posted on the VW intranet, Blume warned that without changes to labour costs, the group would need to cut an additional 50,000 jobs worldwide on top of the 50,000 already planned through 2030. He also conceded that plants in Emden, Hannover, Zwickau and Neckarsulm cannot be guaranteed a competitive utilisation rate in the 2030s. The works council deemed this communication insufficient.
The governance crisis worsened last week when the supervisory board failed to approve the appointment of Bosch manager Erika Rasch as the new human resources director. Worker representatives blocked the appointment, demanding that a new technology division be filled first. The 12-7 vote against management’s restructuring proposals in early July now has a clear parallel in the stalled personnel decision, leaving Volkswagen without a permanent HR chief at a time when labour relations are at their most toxic in years. The impasse has also frustrated shareholders and analysts, who see the boardroom infighting as a barrier to executing the cost-cutting programme that is urgently needed.
Blume has publicly described plant closures as avoidable if “smarter solutions” are found, but he acknowledged that Volkswagen’s overhead costs are 20% higher than those of comparable automakers. The group is grappling with an overcapacity of 500,000 units in Europe alone. Plans reportedly under consideration include shuttering four German factories, although the CEO insists more intelligent alternatives exist. The Second-largest shareholder, the state of Lower Saxony, is watching the developments closely.
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The financial pressure is compounded by a sharp slowdown in China, Volkswagen’s most critical market. Second-quarter deliveries worldwide fell 8.6% to 2.08 million vehicles, with Chinese sales plunging 36.6% to just 424,300 units. That collapse has erased what was once the group’s most reliable profit engine, squeezing margins at exactly the moment when restructuring costs are rising. The German Bundestag recently classified Volkswagen’s situation as “bitterly serious” in a parliamentary debate on the automotive industry.
Analyst sentiment remains deeply divided. JPMorgan reiterated a “Neutral” rating on 14 July, citing the ongoing restructuring and persistent margin pressure. Bankhaus Metzler, by contrast, lifted its price target to €130.00 in early July and maintained a “Buy” recommendation. The wide gap between the current share price and Metzler’s target underscores the uncertainty over whether the group can resolve its internal conflicts and deliver a credible efficiency plan.
Technical indicators offer no respite. The stock is trading well below both its 50-day moving average of €82.73 and its 200-day moving average of €93.33, a configuration that typically signals sustained downward momentum.
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All eyes now turn to 24 July 2026, when Volkswagen is scheduled to publish its half-year financial report. Investors will scrutinise management’s ability to detail cost-saving measures amid open resistance from the works council and the IG Metall union, which has already threatened a “hot autumn” of protests. The subsequent works meetings in late August will test whether Blume can bridge the chasm between the boardroom’s strategic ambitions and the workforce’s demands for transparency — and whether the share price can finally find a floor.
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