Oliver Blume and Volkswagen choose managed decline
By Josie Calloway · Reporting from Pittsburgh ·
CEO Oliver Blume wants you to believe he’s won a victory. He calls the supervisory board’s approval of a massive transformation plan a "strong signal for the future," according to the Daily Maverick.
CEO Oliver Blume wants you to believe he’s won a victory. He calls the supervisory board’s approval of a massive transformation plan a "strong signal for the future," according to the Daily Maverick. But as a former charge nurse, I know a "ceasefire" in a dying ward isn't a recovery—it's just the moment the screaming stops before the crash.
Volkswagen is bleeding out, and the people holding the bandages are the ones who caused the wound.
A Ceasefire in a Dying Ward
The numbers are clinical and they are brutal. El País reports that VW has lost 72% of its market value since March 2021. To stop the slide, the board is cutting another 50,000 jobs worldwide—on top of 50,000 already gone. They’re eyeing the closure of four German plants: Emden, Zwickau, Neckarsulm, and Hannover.
DW points out the absurdity of the scale: VW employs 60% more workers than Toyota and nearly 240% more than Ford. This isn't "industrial strength"; it's bloat. When you're that top-heavy, you don't pivot; you tip over. We saw this same desperation during the Great Recession automotive crisis, where legacy giants tried to prune their way back to health while the world shifted beneath them.
The High Price of Political Protection
The "other side" argues that this structure—where the state of Lower Saxony holds 20% of voting rights and unions hold half the board seats—is a shield. They claim this "co-determination" protects the working class from the cruelty of the market. It’s a seductive argument for anyone who’s seen a town die when a factory closes.
But this shield is actually a stranglehold. Analyst Matthias Schmidt calls it exactly that. By prioritizing political optics over operational reality, VW spent years neglecting the necessary workforce adjustments. This is the ghost of the British Leyland collapse. In the UK, the government and unions tried to nationalize and protect a bloated, inefficient conglomerate to save faces and votes. They traded long-term viability for short-term peace, and the result was a systemic collapse that destroyed the very industry they claimed to be saving.
When you refuse to restructure because it's politically inconvenient, you aren't saving jobs; you're just deciding that everyone goes down together instead of some people being saved. We saw a version of this with the Alstom restructuring, where state influence over employment levels turned a necessary pivot into a prolonged agony.
The Chinese Horizon
The reality is that while Lower Saxony and the IG Metall union fight over who gets to keep their desk, the market has already moved. China accounts for a third of VW's sales, and as Moritz Schularick warns, the company could eventually be bought by a Chinese maker like BYD.
The EU is trying to build a wall with tariffs and the Industrial Accelerator Act, but you can't tariff your way into efficiency. If your factory expenses in Germany are twice those of your competition, as Meghan Ostertag notes, a subsidy is just a slower way to go bankrupt.
The "victory" Blume claims is a delusion. By avoiding an extraordinary general meeting and keeping the current power structure intact, VW has chosen a managed decline over a radical cure. They are treating a stage-four malignancy with a handful of aspirin. Unless the political vetoes are stripped and the bloat is cut without sentiment, the workers in Zwickau and Martorell aren't being "protected"—they're just being asked to wait in line for a bankruptcy that's already been written.