VW’s Margin Crisis Prompts 28,000 Job Cuts as Industry Rallies Against EU Tariffs
13.06.2026 - 17:04:53 | boerse-global.de
Volkswagen is caught in a pincer movement. While the carmaker joins a rare industry-wide pushback against planned European Union tariffs on Chinese electric vehicles, it is simultaneously preparing for its most contentious annual general meeting in years — with 28,000 job cuts on the table and an operating margin that has cratered to levels not seen since the diesel crisis.
The manufacturer’s shares rose 2.58 percent to €88.90 on Friday, briefly nudging above the 50-day moving average of €88.72, as investors welcomed the public alliance with Renault and Stellantis against the proposed levies. The stock, however, remains roughly 18 percent below its 52-week high and is still nursing a year-to-date loss of around 16 percent. The relative strength index sits at a neutral 50 points, offering little directional conviction.
Behind the political manoeuvring lies a dire profit picture. Volkswagen’s operating profit halved in 2025 to €8.9 billion, pushing the operating margin down to 2.8 percent — the weakest showing in a decade. CEO Oliver Blume has acknowledged that tariff-related costs, stemming from both direct EU measures and retaliatory effects on Mexican production and European exports, are taking an estimated €5 billion toll annually. To stem the bleeding, the group is targeting 19,000 job cuts by the end of this year, with a total of 28,000 positions to be eliminated at the core VW brand by 2030, largely through voluntary departures.
Should investors sell immediately? Or is it worth buying Volkswagen?
The AGM on 18 June is shaping up as a stress test for Blume’s strategy. Shareholders are expected to press management on whether the voluntary reduction programme can close the remaining 9,000 positions without resorting to plant closures, and what the future holds for the Osnabrück site. The broader question hanging over the gathering is how Volkswagen intends to finance its ambitious electric-vehicle investments while defending market share in an increasingly crowded field.
Analysts remain cautious. JPMorgan reaffirmed its “neutral” rating with a price target of €110, while Bernstein also stuck with a hold. Both see scope for a surprise on the operational margin, which Blume has guided to land between 4.0 percent and 5.5 percent in 2026, with a longer-term aspiration of 8 to 10 percent. That would require strict cost discipline in the core business and a successful overhaul of the Cariad software unit, which is being restructured through new alliances with Rivian and Xpeng.
The industry’s collective stand against Brussels adds a political dimension to the financial pressures. Volkswagen, which generates a significant chunk of revenue in China and manufactures extensively with local partners, argues that punitive tariffs would strain a tightly woven supply network and hurt European competitiveness. The stock market has given the initiative a cautious thumbs-up, but the real test lies in execution at home.
For Blume, the path ahead is narrow: he must convince investors that the job cuts will restore profitability without triggering labour unrest, that the tariff battle can be won without sacrificing access to China, and that the shift toward electric vehicles will eventually pay off. The 18 June AGM will provide the first verdict, but the journey to 2030 is fraught with obstacles.
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