Surprise VW deal: Supervisory board unanimously backs management plan

A confrontation at Volkswagen that appeared close to escalation was defused at the last minute. On Thursday evening, the company's supervisory board unanimously approved the future plan proposed by Chief Executive Oliver Blume, a result few observers expected after days of public disagreement.

The agreement came earlier than planned. The board's full meeting was scheduled for Friday, but negotiations had already brought together representatives of the Porsche and Piëch owner families, the state of Lower Saxony, which holds a 20% stake in Volkswagen, and employee representatives. The board's executive committee met on Thursday, and the company said that meeting opened a path to a solution.

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The supervisory board has unanimously approved the future plan of the Group Executive Board.

Volkswagen described the plan as a drive toward competitive costs, more efficient structures and a lasting improvement in profitability. It is targeting an operating return on sales of 9% in 2030, compared with nearly 4% now. The company called it the most far-reaching strategic transformation program in its history.

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Strong signal for the Volkswagen Group

The plan also reflects a sharply lower outlook for sales. Volkswagen expects to sell only 9 million vehicles worldwide each year, compared with more than 11 million several years ago. The company estimates that Europe has excess capacity of 500,000 vehicles a year.

That pressure leaves the future of plants in Emden, Zwickau, Hanover and Neckarsulm uncertain. Politicians and trade unions have strongly criticized possible closures, and the supervisory board's agreement did not settle the issue. The board acknowledged that no competitive follow-up use could currently be guaranteed for the plants in stages between 2031 and 2034.

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strategically most far-reaching transformation program in the history of the Volkswagen Group