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Volkswagen's High-Stakes Restructuring Battle

Wall Street Journal US Business •
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Volkswagen CEO Oliver Blume is pushing a radical restructuring plan that would double job losses to 100,000, but faces fierce resistance from the company's complex board structure.

Blume is considering a unprecedented "nuclear option" — bypassing the supervisory board and taking the plan directly to shareholders if board factions fail to agree at Friday's meeting. This approach mirrors activist investor tactics and breaks from Germany's traditional stakeholder capitalism model.

The pressure mounts as Chinese automakers like BYD expand into Germany's home market after dominating China, while U.S. tariffs and the EV transition cost billions. Blume aims to halve Volkswagen's 150 vehicle models and cut overhead, including stakes in four German soccer clubs.

Germany now fears "Detroit-ization" — mass deindustrialization that wiped out U.S. manufacturing jobs. Volkswagen's bloated structure, with excessive interfaces and duplicate layers, makes it particularly vulnerable. The company employs many more workers per car than competitors, with office staff concentrated in high-cost Germany where labor protections make cuts difficult.