The Supervisory Board of Volkswagen approved on the evening of Thursday, September 3, the drastic restructuring plan presented by CEO Oliver Blume. The project had been rejected at the July meeting due to opposition from the Lower Saxony government and unions to the proposals of an additional 50,000 layoffs, on top of the 50,000 already underway, and the closure of four plants in Germany.
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The unanimous approval came as a surprise during an extraordinary session of the Board, which was supposed to meet on September 4. Until late Thursday afternoon, there seemed to be no room for compromise. According to Handelsblatt, the Board of Directors was, however, ready to bypass the Supervisory Board and submit the plan to a shareholder vote at an extraordinary general meeting. This would have been a first in Germany.
The Board of Directors, to neutralize the co-determination system that gives the Land veto power over strategic decisions (thanks to a 20% stake), had threatened to spin off the main Volkswagen brand. The Lower Saxony government opposed such a dramatic turn.
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The group announced in a statement that it will streamline its holdings and reduce the model range by about 50%.
The decision gives Blume a stronger mandate to carry forward his “Plan for the Future.”
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