German carmaker Volkswagen (VW) CEO Oliver Blume addresses an annual news conference to present the company's results at the company's headquarters plant in Wolfsburg, central Germany, on March 11, 2025 Photo by Ronny Hartmann /Getty

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You can always tell when Volkswagen is under pressure because whenever it is, it always threatens to sell Ducati. In every instance in recent memory of the German auto giant being in trouble – the Dieselgate scandal, the COVID crisis, and its current existential quest for profitability — a rumour always surfaces that Itay’s most famous motorcycle manufacturer is on the chopping block. 

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Now, many (most?) of you were probably not aware that Volkswagen owned the famed Ducati. Technically, it doesn’t. It is Lamborghini that officially owns just-turned-100-years Ducati, and Lambo is, of course, owned by Audi, which means that, in fact, Ducati is owned by Volkswagen Group, a detail, but a telling one, if for no other reason than the fact that, during the Dieselgate-era rumour-mongering, Ducati was supposedly being packaged with Lamborghini in the sale. Nonetheless, rumours of Ducati’s sale are, as I said, as foretelling of Volkswagen AG’s problems as Shiller’s (cyclically adjusted) price-to-earnings ratio is in signalling problems in stock markets.

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And understand that Volkswagen is definitely in crisis, perhaps even more so than it was during Dieselgate. Even if that is an exaggeration, suffering existential crises every five years or so is not the route to building a profitable manufacturing base or protecting shareholder value, neither of which Volkswagen — both the automaker and the Group — has done well of late.

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A Volkswagen assembly worker performs final checks and corrections on ID line electric cars in the paint shop at the Volkswagen electric car factory on February 24, 2026 in Emden, Germany Photo by Focke Strangmann /Getty

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Indeed, according to Reuters, CEO Oliver Blume’s recent announcement that four assembly plants will be shuttered and 45,000 workers laid off — on top off the 50,000 job cuts already planned — “would be the largest restructuring in automotive industry history.” Authors Christina Amann and Christoph Steiz in fact compare VW’s situation to the “major shake-ups” that lead to General Motors’ bankruptcy in 2009. That Blume could even consider closing four plants in Germany — Hanover, Zwickau, Emden, and Audi’s ​Neckarsulm base — speaks to the desperation in the boardroom and the increasing impotence of the once-dominant IG Metall union.

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As to why this is happening now, the immediate answer — and the one that I suspect VW’s board members are trying to make the most public — is the company’s reversal of fortunes in China. Once the cash-cow that let management ignore VW’s structural problems at home, Volkswagen’s sales in the People’s Republic have dropped by almost half a million in the last four years as Chinese consumers no longer see as much cachet in European brands as they once did. Audi is likewise down, and Porsche, well, it’s having a rough time everywhere as of late.

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Nor are the company’s short-term plans likely to help shore up those German plants. Volkswagen has pretty much given up on building its own software-defined vehicles, turning to a partnership with, amongst others, Xpeng to help it develop better software packages faster.

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Oliver Blume, Chairman of the Board of Management Volkswagen Group, speaks during the event ‘Group Night Shanghai 2025’ hosted by Volkswagen ahead of the Shanghai Auto Show in Shanghai on April 22, 2025 Photo by Wang Zhao /Getty

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The company is also said to be looking to import Chinese-developed models to its home markets — for instance, an extended-range electric vehicle (EREV) SUV co-developed with SAIC called the ID.Era 9x that some think might replace the Slovakia-built Touareg in Europe. That this new model would be developed as part of VW’s recent “In China, For China” design process does not bode well for either re-opening European plants or positioning Europe as the company’s primary design focus.

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All of this talk about China — and, for that matter, selling Ducati — can’t mask the fact that Volkswagen’s real problems are largely self-inflicted and the board members are not masters in their own domain. Blume can propose all the plant closure he wants, but Volkswagen’s management team cannot close those four plants, nor lay off any of those workers in and of themselves.

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That’s because the local Lower Saxony government holds a vetoing share of the voting rights in Volkswagen AG. At the end of the Second World War, the British military, which was operating VW at the time, handed over the plant to the German federal government and Lower Saxony. And even though both governments have sold some of their holdings, Lower Saxony still retains 20% of the company’s voting rights, important when you consider that five of Volkswagen’s six western-Germany assembly plants are located within its boundaries.

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Oliver Blume, CEO of the Volkswagen Group, is seen at their booth during the opening day of the International Motor Show IAA on September 9, 2025, in Munich, southern Germany Photo by Tobias Schwarz /Getty

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Making the entire management structure even more unwieldly, labour representatives hold half the seats on the company’s board and, according to the Volkswagen Act of 1960, a two-thirds majority of the supervisory board is needed for the “construction and relocation of production facilities.” I don’t think it takes much imagination to understand that neither government nor unions are going to accede to massive lay-offs of their, respectively, voters and dues-paying members.

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All of which is likely to make the next board meeting, scheduled for July 9 in Wolfsburg, very interesting. No matter urgent it may be for VW to cut costs — and leading German auto analyst Matthias Schmidt told Reuters that Blume “has to get this ​done; with the market becoming hyper-competitive there is no other option” — VW’s powerful Work Council and the unions hold sway over much of the decision. Worse yet, the Premier of Lower Saxony has already vowed that his state “will not approve a development that banks on plant closures as a supposedly easy solution.”

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So where does this leave CEO Blume’s plan? Well, according to Reuters, analyst Schmidt says a potential compromise “might involve the closure of two of the proposed four plants.” The question then becomes if that will be enough, or whether Volkswagen’s board will be having these same dire conversations — including rumours of selling of Ducati — yet again in five years.

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Ducati Panigale V4 Lamborghini and Lamborghini Revuelto Photo by Ducati

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Perhaps the most interesting thing, at least to a die-hard biker who worships all motorcycles Italian — the 1994 to ‘98 916 remains the most beautiful two-wheeler ever designed — is that Volkswagen (Group) ownership has been wonderful for Ducati’s bottom line. Prior to the VW’s 2012 takeover, it was but a niche player, and a largely unprofitable one at that. In the ensuing 14 years, however, access to a larger supplier base, a now almost-Germanic discipline in its product portfolio, and a dramatic increase in manufacturing quality have made Borgo Panigale the envy of motorcycle manufacturers all over the world.

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Profitability is booming, and the brand virtually owns motorcycle road-racing, being the dominant players in both MotoGP and World Superbike (the two-wheeled equivalents of Formula One and NASCAR). Even more incredibly — if you know your classic motorcycles — they are now amongst the most reliable and well-built motorcycles on the planet as well.

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The point I am trying to make is that, judging from Ducati’s (and Lamborghini’s for that matter) recent success, Volkswagen is a master on teaching vehicle-makers of all stripes how to be leaner, meaner, and, most importantly, profitable. They just can’t do it themselves.

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