Volkswagen's sweeping restructuring deal reveals the force of the China shock hitting Germany's economy as the world's largest car market rapidly becomes a major competitive challenge.
The stiff headwinds from China facing Germany's iconic carmaker helped break a logjam on the board of directors and convince employees, union and local government officials that Volkswagen needed rapid change.
The plan announced on Thursday will include the loss of 50,000 jobs and probably four German auto plants where manufacturing costs can no longer compete.
Board members representing employees had rejected CEO Oliver Blume's plan in July, and Volkswagen’s worker-friendly structure, with employee representatives holding half the board seats and the local government of Lower Saxony two, had raised doubts about whether Blume could push through his plan.
The board decision was a "much better than feared outcome," wrote Deutsche Bank analysts on Friday.
