Volkswagen CEO Oliver Blume Faces Internal Resistance Over Restructuring

CEO Oliver Blume is facing significant internal resistance while attempting to implement a restructuring plan designed to reduce high fixed costs and restore competitiveness. The company currently operates with fixed costs approximately 30% higher than those of its rivals, prompting a push for aggressive reductions.

Blume is caught between three conflicting power centers. The Porsche-Piëch family is demanding more aggressive cost cuts, while labor leaders strongly oppose job reductions and plant closures. Simultaneously, the government of Lower Saxony, which holds a 20% voting stake and veto power, remains a critical hurdle in the decision-making process.

Works council chief Daniela Cavallo recently stated that trust in management and Blume "has been damaged — not irreparably, but damaged." To resolve the deadlock, Blume may consider compromising through retirement programs and voluntary departures or lowering profitability targets to appease labor.

The company's 20-member supervisory board is scheduled to review the latest version of the restructuring plan on September 4.