Key facts
- Volkswagen shares increased approximately 7% following the supervisory board's approval of a major turnaround agreement.
- The restructuring plan includes approximately 50,000 additional job cuts, bringing the total workforce reduction to 100,000.
- The future of four German plants is under review as part of the agreement.
- The deal averts a potential clash between management, the supervisory board, unions, and Lower Saxony.
- The agreement is described as the largest restructuring in the company's 89-year history.
Volkswagen shares rose approximately 7% in early Frankfurt trading after the company's supervisory board approved a major turnaround agreement. The deal, described as the largest restructuring in the automaker's 89-year history, includes approximately 50,000 additional job cuts, bringing the total workforce reduction to 100,000. The future of four German plants is also under review as part of the agreement, which averted a potential clash between management, the supervisory board, unions, and Lower Saxony, a key shareholder.
The agreement was reached after tense negotiations involving CEO Oliver Blume, Supervisory Board Chairman Hans Dieter Poetsch, and Lower Saxony state premier Olaf Lies. The management board had previously threatened to call an emergency shareholder meeting to bypass the supervisory board if its plans were opposed. This threat paved the way for a compromise, with stakeholders recognizing that failing to reach a deal could lead to prolonged and damaging legal battles.
While the job cuts still need to be negotiated with unions, the approval signals a path forward for the embattled carmaker, which is facing pressure from Chinese rivals and tariffs. The deal also involves postponing plans to create separate legal entities for the group's passenger car and component divisions.