Volkswagen’s supervisory board on Thursday approved a sweeping transformation plan that will see the automaker cut an additional 50,000 jobs as it seeks to tackle rising tariff pressures, excess production capacity and intensifying competition from Chinese rivals.

The restructuring, described as the most extensive in the company’s 89-year history, also involves exploring options for four German plants that are expected to run out of vehicle models over the next decade, according to Reuters.

The agreement also helps Volkswagen avoid a major confrontation with unions by shelving the possibility of an extraordinary general meeting, which management had considered as a way to advance its restructuring plans despite opposition from workers and the company’s second-largest shareholder, Lower Saxony.

The deal will simplify Volkswagen’s complex corporate structure and reduce the influence of its supervisory board—where unions and the state of Lower Saxony hold a majority—over key strategic decisions.

“This is a strong signal for the future of the Volkswagen Group. We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide,” CEO Oliver Blume said in a statement.

Volkswagen shares listed in Frankfurt closed 7.9% higher following the announcement, as investors welcomed the agreement and eased concerns over what sources said could have developed into an unprecedented crisis at Europe’s largest automaker.

The agreement comes after weeks of tense negotiations between Volkswagen’s management and majority owner Porsche SE on one side, and unions and Lower Saxony on the other.

The proposed spinoff of Volkswagen’s passenger car and components businesses has also been dropped from discussions.