Volkswagen’s restructuring plans have faced opposition from Lower Saxony, with the German state saying it would block any separation of three core divisions.

According to a Bloomberg report, Lower Saxony Premier Olaf Lies told the state parliament that separating Volkswagen Passenger Cars, Volkswagen Commercial Vehicles and Components "was not approved – and would not have been possible with me and the state either."

Recently, Volkswagen’s supervisory board approved Future Plan 2030, which will cut a further 50,000 jobs group-wide, bringing total planned reductions to 100,000 by the decade's end.

Lower Saxony holds 20% of Volkswagen’s voting rights and has two seats on the supervisory board.

That gives it a blocking minority because major decisions require more than 80% shareholder approval.

Lies’ comments challenge a central element of CEO Oliver Blume’s restructuring programme.

Volkswagen management is considering whether the Volkswagen car and components units could be reorganised into a leaner and more independent setup.

Some investors believe such a move would improve accountability and make it clearer which units are generating value.

Speaking to analysts and investors on 4 September, Blume said management had received a mandate to develop such a structure, with a completed proposal due to go to the supervisory board in 2027.

"It will take us around a year, and we will come back with a concrete detailed concept to the supervisory board," Blume said, adding that Volkswagen is seeking "a more efficient structure" and greater transparency.

Delaying a decision was an important part of last week’s broader agreement between management and labour representatives.

Before that, both sides had seemed to be heading towards a confrontation, but negotiators softened the wording concerning four German plants with uncertain futures and the proposal to carve out Volkswagen Passenger Cars and Components.