The power struggle inside Volkswagen has intensified after the planned appointment of Bosch executive Erika Rasch as the new human resources director collapsed in the supervisory board. Worker representatives withheld their consent, insisting that a new technology department must be established first before any personnel changes can proceed. The deadlock leaves a critical leadership vacancy unresolved as the company barrels toward a high-stakes half-year earnings release.
The tussle over Rasch’s appointment is the latest flashpoint in a broader confrontation between management and labor. Chief executive Oliver Blume confirmed in an internal memo that the group will cut 50,000 jobs worldwide, a move designed to close a 20 percent cost disadvantage versus competitors. That figure replaces the earlier, more aggressive plan to shutter four German factories — in Emden, Hanover, Zwickau and Neckarsulm — which the supervisory board voted down by 12 votes to 7 at the start of July. Blume has since described plant closures as avoidable through “smarter solutions,” though the confirmed headcount reduction is itself far-reaching. The IG Metall union is already threatening a “hot autumn” of protests, warning that the total number of jobs at risk could reach 100,000.
Zwickau’s Uncertain Future and a Chinese Lifeline
One of the plants originally slated for closure, Zwickau in Saxony, may yet find a reprieve through an unconventional route. State economy minister Dirk Panter has proposed forming a joint venture with a Chinese automaker, allowing local production in Germany to sidestep EU import tariffs on Chinese-made vehicles. While Volkswagen has not responded to the suggestion, the proposal highlights the lengths to which regional politicians will go to preserve the site’s long-term viability.
New Product Moves and Regulatory Adjustments
Amid the restructuring turmoil, Volkswagen continues to push its product pipeline. On July 15, the group unveiled the “ID. Cross,” a compact electric SUV built on the MEB+ platform, slated to launch in autumn 2026 as a volume seller. Separately, it raised the recommended retail prices for combustion-engine models in Germany by 1.0 to 1.2 percent to cover technical upgrades required by the EU7 emissions standard. Pricing for the ID electric lineup remains unchanged.
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China Slump Deepens the Earnings Squeeze
The operational headwinds are mounting. Global deliveries fell 8.6 percent in the second quarter to 2.08 million vehicles, with the Chinese market — long a profit engine — suffering a 36.6 percent plunge to 424,300 units. That drop compounds the margin pressure from the domestic restructuring and the ongoing boardroom discord.
Stock Near Lows, Analysts Split
Volkswagen’s preference shares closed Friday at €73.12, down 0.52 percent on the day and 29.79 percent lower since the start of the year. The stock is trading just 5.66 percent above its 52-week low of €69.20, hit on July 1. Analyst opinions remain divided: JPMorgan’s Jose M. Asumendi reiterated a “Neutral” rating with a €110 target on July 13, noting that the order book had grown 12 percent since January; Deutsche Bank Research issued a “Buy” call on July 16. Bankhaus Metzler was even more bullish, lifting its price target to €130 earlier this month.
The July 24 Pivot Point
All eyes now turn to July 24, when Volkswagen publishes its half-year financial report. Investors will be looking for concrete evidence that the cost-saving measures can deliver results despite labor opposition, whether the order-book momentum translates into operating profit, and — crucially — whether the standoff over the HR and technology departments can be resolved in the coming weeks. Until then, the mix of a blocked leadership appointment, an escalating labor dispute, and a deepening China crisis leaves the stock firmly in the doldrums.
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