This article first appeared on GuruFocus.
Volkswagen AG rose 5.51% intraday after its supervisory board unanimously approved chief executive Oliver Blume's restructuring plan, which the German carmaker described as the most extensive transformation program in its history. Up to 50,000 group-wide positions will go, management roles included, following roughly 50,000 reductions since 2024. Volkswagen employs 652,000 people.
Vehicle sales fell 8.4% in the first half of 2026 and operating profit dropped 11.6%, leaving the operating margin at 3.8%. Volkswagen wants 9% by 2030. Volkswagen shares are down over 20% year to date.
The board acknowledged that European capacity now runs more than 500,000 units above demand, and the company plans to discontinue half its models over nine years to cut complexity. Four German plants, Emden, Zwickau, Hanover and Neckarsulm, will receive no new models unless costs come down, with alternative uses under assessment.
Blume had proposed spinning off the VW brand and components business into separate entities, a move shareholders read as diluting the influence of Lower Saxony, the state that holds a blocking minority stake. IG Metall said the spin-off is "off the table."