Using VW as an example: The salami tactic and why poor communication is often a cold-blooded strategy at large corporations

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Published on: August 25, 2026 / Updated on: August 25, 2026 – Author: Konrad Wolfenstein

Using VW as an example: The salami tactic and why poor communication is often a cold-blooded strategy at large corporations – Image: Xpert.Digital

Crisis communication as a tool: Why board members deliberately remain unclear

Silence as a strategy – How corporations use uncertainty as a management tool

The Volkswagen case: How a corporation is restructured through deliberate lack of transparency

When chaos has method: Why management prefers to keep the workforce in the dark in order to profitably enforce uncomfortable truths.

In the modern business press, inadequate crisis communication by large corporations is often interpreted as incompetence, being overwhelmed, or simply as a technical error on the part of the responsible managers. However, this superficial view overlooks the complex reality of strategic corporate management, particularly in highly regulated and unionized markets. A comprehensive economic analysis reveals that what is perceived externally as clumsy information policy or even disastrous communication is, in many cases, the result of a deliberate, rationally calculated strategy. Especially during periods of profound structural transformation, executive boards resort to targeted information asymmetries and the so-called salami tactic. The gradual release of bad news serves not to promote transparency, but rather to strategically erode resistance, realign negotiating positions, and prepare for drastic cuts. Using the example of traditional large corporations in the automotive industry, it is possible to trace in detail how management, by deliberately creating uncertainty among the workforce, lays the groundwork for necessary but highly unpopular restructuring measures. The following text examines these mechanisms from a game-theoretical, behavioral economics and corporate strategy perspective, deliberately avoiding simple blame assignments in order to reveal the underlying economic logic.

When uncertainty becomes a calculated strategy: Why the silence of top management is not a coincidence, but a systemic element

The staging of ignorance

When a CEO publicly describes their company's situation as "more than critical," yet fails to provide concrete figures on plant closures or job cuts for months, a question arises that is rarely asked openly: Is this truly incompetence, or is it deliberate? The knee-jerk response of many observers is that management communication is simply poorly executed, unprofessional, too late, and too vague. This interpretation, however, falls short. Especially in large, strategically operating corporations, unclear, delayed, or fragmentary communication is often not a technical flaw, but a consciously chosen negotiating tool. A closer look at the mechanics of restructuring, turnaround programs, and power struggles between management, the supervisory board, and employee representatives reveals a recurring pattern: Information is not withheld because it is unavailable, but because its distribution itself becomes a weapon.

The Volkswagen case provides a textbook example of this in the summer of 2026. The company's works council accused the board of management of "disastrous external communication" and described a workforce that was unsettled and frightened. This criticism was based on an internal survey initiated by the works council, the results of which showed a high degree of agreement with the criticism of management's communication style. CEO Oliver Blume had shortly before described the company's situation as "more than critical" in an interview that was initially only published on the intranet. The irony was that many employees first learned of this assessment from the public media and not from within the company itself, because the interview was only posted online on Friday afternoon, when most of the workforce had already gone home for the weekend. For weeks, the board remained conspicuously vague on specific questions such as the future of the plants in Zwickau, Emden, Hanover, and Neckarsulm, as well as the extent of potential job cuts. This pattern had already been repeated months earlier, when the works council accused management of leaving tens of thousands of employees in the dark about a planned massive reduction in staff, even though media reports had already spoken of more than 100,000 jobs to be cut worldwide.

The salami tactic as a business calculation

In restructuring practice, a specific term has become established for this behavior: the salami tactic. It refers to a deliberately piecemeal approach, in which damaging information is not released all at once, but rather in small, staggered portions to the public or the workforce. Restructuring consultants explicitly warn against this approach, as it regularly leads to a loss of trust and provokes accusations that the company is dragging out the painful truth in unnecessarily many small, agonizing stages. Nevertheless, this very pattern is repeatedly chosen in corporate reality, not out of incompetence, but because it offers tangible tactical advantages from management's perspective.

The first advantage lies in negotiating power. Anyone who discloses a final figure for plant closures or job cuts early on immediately loses leverage in the subsequent negotiations with the works council, union, and supervisory board. Every further round of negotiations would then revolve solely around softening the already known maximum demand. If, on the other hand, the figure is hinted at gradually—first as a vague extreme scenario, then as a range, and finally as a more concrete, but still not final, figure—management retains the opportunity to reposition itself in each phase of negotiations, to present concessions as successes, and to shift the focus of the discussion in its own favor. A historical example of this is former VW CEO Herbert Diess, who, at a supervisory board meeting, initially floated a figure of up to 30,000 jobs at risk as an "extreme scenario," only to later downplay it. Such an anchoring technique is known from negotiation psychology: someone who first names a drastic number and later slightly retracts it can appear as supposedly willing to compromise, even though the actual target figure was fixed from the beginning.

The second advantage concerns capital market communication. Listed companies like Volkswagen are under the scrutiny of analysts, rating agencies, and institutional investors. A complete, undisguised disclosure of all crisis details in a single day could trigger share price reactions that are more difficult to control than a series of smaller, individually less dramatic announcements. By releasing information to the public in manageable chunks, management teams can control the capital market's reaction in smaller, more predictable steps and simultaneously gain time to strategically position supporting measures such as share buyback programs, dividend announcements, or positive news from other parts of the company.

The third advantage is of a legal and co-determination nature. In Germany, operational changes, mass layoffs, and plant closures are subject to numerous co-determination and information obligations vis-à-vis the works council and supervisory board. Communicating a complete, legally sound figure early on risks binding oneself in subsequent negotiations or establishing claims that could be avoided with deliberately more vague communication. This is precisely why official figures on cost-cutting measures often remain conspicuously imprecise, while at the same time more detailed figures leak through media reports for which the company itself is not officially responsible.

Controlled uncertainty as a management tool

Besides the strategic negotiating advantages, there is a more subtle but equally effective function of deliberately withholding information: the creation of pressure to act through uncertainty. People who don't know whether their job, plant, or department will be affected by a cost-cutting program typically develop a greater willingness to compromise. This dynamic is well-documented in behavioral economics: ambiguity and uncertainty are perceived by most people as significantly more unpleasant than a clearly defined, even unpleasant, outcome. Therefore, those who are left in the dark for weeks and months about whether their location will be closed or not are ultimately more inclined to agree to concessions on wages, working hours, or site guarantees simply to finally gain clarity. From the perspective of management that has to implement tough cuts, this psychological effect can certainly be desirable, even if it is never explicitly stated as such.

In addition, there is an element of internal discipline. A workforce preoccupied with diffuse anxieties has less capacity for collective, coordinated resistance than a workforce that has a clear, shared understanding of the facts from the outset. The salami tactic thus fragments not only the information itself, but also any potential resistance to it, because each new piece of information must be processed, discussed, and emotionally dealt with individually before the next piece of information is released. The VW works council describes precisely this logic of attrition when it observes that many employees learn more from the media than from those actually responsible within the company itself, thereby creating constant new uncertainty instead of delivering a single, clear, albeit painful, message.

The limits of tactics: When salami politics backfires

As rational as the salami tactic may seem from a narrow, short-term negotiating perspective, the costs it incurs in the medium to long term are high. Restructuring consultants therefore explicitly point out that a deliberately piecemeal approach is generally doomed to failure because the withheld information leaks out uncontrollably, thus preventing control over one's own communication from being secured, but rather lost. This very phenomenon can be observed at Volkswagen: Despite, or perhaps because of, the reticent official communication, detailed figures on possible plant closures and job cuts have long been circulating in press reports, without the company itself making an official statement. The result is a paradoxical situation in which the workforce is formally kept in the dark, but informally confronted with sometimes dramatic, unconfirmed figures, which increases rather than alleviates the uncertainty.

Another effect concerns trust in leadership itself. If employees develop the feeling over a prolonged period that they are receiving secondhand information about their professional future, the authority and credibility of management erode significantly. The Volkswagen Group Works Council explicitly addresses precisely this loss of trust when it criticizes the fact that repeated press quotes from the CEO provide no clarity and only exacerbate the situation. A CEO who repeatedly uses dramatic but imprecise phrases like "more than critical" in interviews, without providing the corresponding facts, loses precisely the interpretive authority that should have been the goal of controlled communication. While the message is received dramatically, it is increasingly interpreted as an expression of weak leadership rather than strong leadership.

The emotional dimension of restructuring also reveals a blind spot in the salami-slicing approach. Consulting practice and research on restructuring communication emphasize that companies often focus solely on the legal aspects of job cuts, neglecting the emotional dimension, such as the concerns and anxieties of the workforce. When this emotional dimension is ignored, employees feel they are not being taken seriously, which reduces their willingness to embrace the transformation. This is precisely what can be observed in the current VW situation: The works council not only criticizes the lack of facts regarding job cuts and the savings program, but also complains that the board simply lacks a positive narrative for the future of the company. Figures alone, even if they are eventually fully disclosed, are apparently insufficient to regain trust if emotional and narrative leadership is absent throughout the entire process.

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Power struggles in corporate management: The devastating consequences of poor communication

Power shifts between the management board, supervisory board and workforce

The VW case also demonstrates that strategic withholding of information is not merely a tool used by the board of directors to vis-à-vis the workforce, but rather part of a more complex, multi-level game involving the board, the supervisory board, major shareholders, and employee representatives. When the supervisory board initially rejected a proposed cost-cutting package, it became clear that even within the company's management, there was no unified information base or communication strategy. For the workforce, such internal dissent creates additional uncertainty, as even official announcements can be qualified or revised at any time. From the board's perspective, however, such disagreement can also be used as leverage in negotiations, because decisions can be postponed, if necessary, until a vote is taken with the supervisory board or shareholders, without the board itself appearing solely responsible for unpopular decisions.

A similar pattern emerged in previous conflicts, such as during Herbert Diess's tenure. At that time, works councils accused the CEO not only of a provocative communication style but also of preferring to meet with international investors rather than address the concerns of his own workforce. Supporters of the management at the time, however, defended this approach as a necessary wake-up call in light of structural overcapacity and the urgently needed transformation towards electromobility and digitalization. This recurring fundamental conflict makes it clear that the evaluation of corporate communications is rarely just a matter of style, but always also concerns the fundamental question of whose interests should be served by which information policy.

Why open communication would still be the better strategy

From an economic perspective, the salami tactic can only be justified if the short-term negotiating advantages outweigh the long-term costs to trust and reputation. However, this calculation is increasingly less likely to work out in complex, publicly scrutinized restructuring processes like the one at Volkswagen. Modern information economics has drastically shortened the half-life of exclusive, proprietary knowledge. Internal documents, board interviews, and internal surveys are now disseminated almost in real time to news agencies, business sections, and ultimately the general public. A company that attempts to artificially restrict information is thus acting against the technological and media reality of a fully networked information space in which every employee meeting, every intranet interview, and every internal memo potentially becomes public.

From a business perspective, a more sensible approach would be a communication strategy that prioritizes maximum transparency from the outset, coupled with clearly structured processes. Restructuring experts recommend treating the communication of a cost-cutting program as an integral part of stakeholder management from the very beginning, rather than as a secondary form of public relations work that only begins after decisions have been made. Communicating clear, even uncomfortable, facts early on and linking them to a coherent strategic narrative explaining why the company needs certain cuts and to what extent, can stabilize trust even in a crisis. This is precisely what the VW works council is currently missing when it criticizes the board for lacking a positive vision for the future. Figures on operating returns of 3.8 percent or average cost savings of 20 percent at German plants may be relevant for analysts, but they only provide meaningful guidance for the workforce when embedded in a clear and consistent overall narrative.

A second key element would be the consistent simultaneity of internal and external communication. The VW case vividly illustrates how counterproductive it is when a key board member interview is initially published only internally and then with a delay, while external media report on it simultaneously or even earlier. This imbalance creates the feeling among employees that they are being treated as a lower priority than the public, which further strains their fundamental loyalty to their employer. A strict rule that internal stakeholders are informed at least simultaneously, if not beforehand, would prevent this structural breach of trust from the outset.

Thirdly, clearly defined timelines are needed for disclosing decisions, even if these decisions are not yet final. Instead of leaving it open for weeks when and in what form decisions about the future of individual plants will be made, the company's top management could communicate definitively when and what kind of decision can be expected. While this form of process transparency does not replace clarity about the outcome itself, it reduces the vague uncertainty surrounding time, which many employees find particularly stressful.

The economic dimension of communication failure

Beyond the individual company level, the way a corporation like Volkswagen communicates its restructuring also has a macroeconomic dimension. With several plants in structurally weaker regions of Germany, such as Saxony, Lower Saxony, and Baden-Württemberg, Volkswagen is a key regional economic anchor employer. Uncertainty about the future of individual plants therefore affects not only the direct employees but also an entire regional ecosystem of suppliers, service providers, municipalities, and private households that depend on the economic stability of these locations. A deliberately vague communication strategy lasting for months artificially prolongs this economic uncertainty and thus causes macroeconomic consequences that extend far beyond the actual internal negotiation dynamics, such as delayed private investment decisions, declining regional consumer demand, or an increased exodus of skilled workers who seek alternatives early on as soon as the first rumors of possible plant closures circulate.

Furthermore, there is a reputational effect that extends beyond the automotive sector. Germany positions itself internationally as a location with high legal certainty, reliable co-determination, and stable employer-employee relationships. When one of Germany's best-known industrial groups is publicly criticized for "disastrous communication," it sends a signal beyond national borders that even established German corporations resort to an information policy in crisis situations that does not live up to their own standards of social partnership and co-determination. For international investors, suppliers, and potential cooperation partners, this is a relevant factor in assessing how predictable and stable a company actually is, even in difficult times.

Calculated ambiguity

Ultimately, the realization remains that poor communication in large corporations is rarely a matter of chance or incompetence. It is frequently the result of a conscious trade-off between short-term negotiating advantage and long-term loss of trust, in which many management teams, as currently seen in the Volkswagen case, initially rely on delay, scarcity, and fragmentation of information. This salami tactic promises greater short-term control over negotiation processes, capital market reactions, and legal obligations, but simultaneously creates precisely the uncertainty it is intended to control, ultimately systematically undermining the credibility of the company's own leadership. The Volkswagen case exemplifies how this calculation is increasingly less successful in a fully networked, media-saturated information society, because withheld facts inevitably leak out, while the actual goal—maintaining the trust and agency of the workforce—is jeopardized by the very tactics chosen. For companies facing similar restructuring decisions in the future, this offers a clear economic lesson: those who use uncertainty as a management tool pay a price that regularly exceeds short-term tactical gains in the medium term.

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