Volkswagen Board to Vote on Massive Turnaround Plan

The supervisory board of Volkswagen Group will meet on September 4 to vote on a 40-point turnaround plan designed to restore profits. The strategy comes as the automaker faces declining sales in China, new U.S. tariffs, and increased competition from Asian manufacturers.

Proposed by management, the plan includes doubling job cuts, potential factory closures, and the spin-off of various company divisions. These measures face strong opposition from labor representatives and the government of Lower Saxony, both of whom hold a majority on the supervisory board and have proposed alternative plans that avoid layoffs and shutdowns.

To resolve the deadlock, an executive committee meeting is scheduled for September 3 to seek a compromise regarding job risks and workforce reductions. If the supervisory board rejects the proposal on September 4, management may call an extraordinary shareholder meeting in October to put the strategy directly to investors.

While the Volkswagen Law generally requires an 80% majority for major corporate actions, management may attempt to invoke Article 111 of Germany's Stock Corporation Act to lower the required approval threshold to 75%.