VW Shareholder Lower Saxony Urges Restructuring Deal Ahead of Key Board Meeting

A key Volkswagen AG shareholder is publicly urging management and labor representatives to reach an agreement on a sweeping restructuring plan ahead of a critical supervisory board meeting scheduled for September 4. Olaf Lies, the premier of the German state of Lower Saxony, said there was heavy pressure on all sides to find common ground in the coming days.

High-Stakes Negotiations

The automaker's supervisory board is set to discuss a turnaround strategy that could involve tens of thousands of additional job cuts, pitting management against powerful union leaders and the state government. Lower Saxony holds a significant stake in VW, including an effective blocking minority on major corporate decisions.

"I strongly urge that we use the time remaining until the next meeting to bring the different positions together," Lies told journalists on Friday. An executive committee, which includes Lies and VW's works council chief, is scheduled to convene the day before the full board meeting to assess the status of the talks.

Management's Turnaround Plan

Volkswagen's management, led by CEO Oliver Blume, is reportedly pushing for a radical cost-cutting drive to address significant business challenges. The company has been grappling with the impact of costly tariffs, declining demand, and intensifying competition from manufacturers in China.

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The proposed plan includes potentially doubling previously planned job cuts to as many as 50,000 positions, closing factories, and spinning off certain company divisions. Sources familiar with the discussions indicate that a compromise will likely focus on the final number of job reductions and the future of at-risk manufacturing sites.

Balancing Profit and Social Responsibility

Lies emphasized the automaker's broader societal role, highlighting the need for a balanced solution. He noted that VW has historically combined economic goals with social responsibility, a standard he believes should apply to the current negotiations.

"With its sites in Lower Saxony and across Germany, its tens of thousands of employees and their families, and its suppliers and service providers, Volkswagen also bears an enormous responsibility for the wider economy and society," Lies stated. The cost-cutting proposals have already triggered fierce opposition from the company's unions.