Volkswagen Overhauls Management and Considers Football Club Exit Ahead of July 9 Board Meeting

Volkswagen’s stock staged a modest rebound on Friday, climbing 1.56% to €74.32 as investors weighed the carmaker’s sweeping cost-cutting plans against a deepening political standoff over plant closures. The shares, which touched a 52-week low of €69.20 just days earlier, remain deeply in the red for the year with a loss of nearly 30%, and the relative strength index of 33.7 points to oversold conditions.

The recovery comes as CEO Oliver Blume prepares to present a detailed restructuring blueprint to the supervisory board on July 9. Central to the plan is a radical flattening of the management hierarchy: Volkswagen will cut 5,500 positions from its leadership ranks, reducing the total from 21,500 to 16,000. The current complex system of leadership circles will be replaced by a simple four-level model designed to shorten decision-making and clarify responsibilities.

Alongside the organisational shake-up, Volkswagen is overhauling executive compensation. From 2027, a manager’s individual performance will carry much greater weight in bonus calculations. The performance-linked component will rise from the current 13–17% to 35% of the variable bonus. A new three-tier evaluation system – measuring goal achievement, behaviour and impact – will be introduced, and top performers will be highlighted through an ‘Impact Index’. The company is also considering a separate ‘savings bonus’ to prevent restructuring costs from derailing normal bonus targets.

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In parallel, Volkswagen is exploring the sale of its stakes in two Bundesliga football clubs. Audi holds 8.33% of FC Bayern Munich, acquired in 2009 for about €90 million, a stake now valued at over $450 million given the club’s estimated $5.5 billion valuation. Porsche owns 10.4% of VfB Stuttgart, bought in 2023 for around €45 million. Media reports suggest both holdings are under review as part of the broader cost-cutting drive, though no final decision has been made. The company’s stakes in its hometown clubs Wolfsburg and Ingolstadt are not expected to be affected.

These measures come against a backdrop of fierce resistance from the state of Lower Saxony, which holds 20% of Volkswagen’s voting rights and a de facto veto. State Minister Julia Willie Hamburg, also a board member, dismissed speculation about imminent plant closures as ‘not a future strategy’. Four German plants are reported to be at risk: Hannover, Emden, Zwickau and Neckarsulm. Lower Saxony insists on a job guarantee through 2030, and any violation could trigger a €1 billion penalty. Hamburg noted that even if closures were pursued, lengthy lead times mean they would not take effect before 2030.

The board meeting on Thursday will also address production targets. Volkswagen once aimed to build 12 million vehicles annually; that figure is now under debate at 8 million. Meanwhile, the company is trimming its production capacity from 12 million to 9 million vehicles per year. The restructuring extends beyond management into factories, with up to 100,000 jobs globally at risk. The IG Metall union has threatened a ‘hot summer’ of protests if cuts are too harsh.