Volkswagen's supervisory board is meeting to deliberate on a restructuring plan involving four manufacturing plants and billion-euro cost reductions. CEO Oliver Blume has proposed cutting European production capacity, but Lower Saxony's Minister President Lies has publicly blocked plant closures, insisting factories must instead be "operated differently." The standoff is detailed in an internal document described by Handelsblatt as painting a "threatening" picture of VW's financial situation.
Volkswagen cannot fix its cost problem without fixing its capacity problem — and politicians are blocking the most direct route. Lower Saxony holds a 20% stake in VW and has special veto rights, meaning this isn't just political noise; it's a structural constraint on the company's ability to restructure. Until there's a credible path to cutting fixed costs, margin recovery for VW stock remains difficult to price in.
Supervisory board meeting outcome: expected imminently — watch for any official press release from VW on restructuring terms. Q1 2025 VW earnings: late April — will show whether margins are deteriorating further. German federal elections aftermath: ongoing — new government's stance on industrial policy could shift political pressure on VW.
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