New Delhi, July 10 -- WOLFSBURG - Germany's largest private employer went into a supervisory board meeting Thursday with a plan to halve its model lineup and eliminate up to 100,000 jobs globally. It came out having lost the vote 12-7, with its own workers and the state of Lower Saxony blocking the most aggressive restructuring in the company's history.

The rejection does not end the process. Volkswagen Group CEO Oliver Blume, who appeared before the board with CFO Arno Antlitz to present a four-year strategic plan, said the board would reconvene with a revised proposal. But Thursday's outcome confirms that the standoff between management and VW's powerful labor wing has not resolved.

The management plan called for a reduction in annual...