Volkswagen’s turnaround plan might be just delaying its demise

September 7, 2026 — 5:00am

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Volkswagen has won support from its unions to carry out the most sweeping overhaul in the German automaker’s 89-year history. But the biggest tests for the company and its chief executive, Oliver Blume, lie ahead.

After surprising investors this past week with an agreement to cut about 50,000 additional jobs, Blume needs to put his plan into action, reducing costs that he estimates are 30 per cent higher than those of rivals and slashing production capacity by more than 500,000 vehicles a year.

The labour deal “gives Volkswagen some breathing space, but essentially the problem is merely being postponed,” said Matthias Schmidt, an auto industry analyst in Germany.

Volkswagen must confront an array of challenges, from intensifying Chinese competition to the US tariffs that have eroded profit margins and threatened its survival. The deal has spurred hope that the company, and Germany’s ailing industrial sector more broadly, can overcome those obstacles, while also underscoring the pain that companies and their employees are likely to endure as businesses become leaner and less complex.

Volkswagen’s shares gained nearly 6 per cent on Friday, the biggest daily gain in nearly nine months. Even so, the company has lost about a quarter of its value so far........

© Brisbane Times