Volkswagen – Works Council Against Major Share Holder Porsche

The VW Works Council has been opposing major shareholder Porsche's plans for months. It says the co-determination agreement discriminates against VW employees and amounts to a "hostile takeover". Now, at the VW AGM on the 24 April, Porsche wants to amend the VW company statutes to allow itself more influence. They also want the German state of Lower Saxony give up their 20 percent blocking minority, thereby further reducing the power of the VW Works Council. The employee representatives say they won't accept that and are planning to protest at the AGM. Patrick Benning reports from Wolfsburg. Our topic in co-operation with "Handelsblatt". ----------------------------------------------------------- They're out in force. From Emden to Chemnitz to Ingolstadt: Volkswagen Group workers in Hamburg last Thursday – in the media spotlight and in defiant mood. First among equals is Bernd Osterloh – head of the VW works council. Like the journalists, his focus is on one particular question: worker co-determination at Volkswagen: "It's not about big taking over small or small taking over big, but appropriate involvement of the workforce. We want these 360 thousand people – if you include Scania – to have appropriate representation in a works council or supervisory board." Osterloh's appearance here is well-timed and planned. The VW annual shareholders' meeting will be taking place nearby in under an hour's time. The big issue there will be what effect the new power hierarchy will have on the company. Bernd Osterloh is determined to resist the muscle-flexing of VW's biggest shareholder: "This is not a conflict with Volkswagen and Audi. This is a dispute with the management of Porsche. And we will be relentless." Everybody is listening – including some at the conference centre. Most VW shareholders are aware that this is no ordinary AGM. It's more a case of a showdown – between those who want to preserve the status quo at VW and those who wish to change it. Bernd Osterloh, head of the VW works council, versus Porsche chief executive Wendelin Wiedeking. Both sit on the Volkswagen supervisory board – a potentially explosive match-up. In fact, the prospect of Porsche had originally been a source of jubilation in Wolfsburg. Just a year ago, VW executives were paraded with a fanfare before their workforce – with Bernd Osterloh and also Christian Wulff representing the OTHER major VW shareholder: the state of Lower Saxony. They made an appeal: "That's why I always welcomed Porsche involvement in Volkswagen – because I'll always prefer a substantial partner who feels commitments to German industry and jobs to a hedge fund." Except: he may have overlooked one man. Porsche chief Wendelin Wiedeking did not let VW workers have a say in the foundation of the new holding company. And just half of the seats on the new joint works council are for VW staff representatives – although their company is 30 times bigger than Porsche. Porsche CEO Wendelin Wiedeking said last January: "Nobody can stop us now and prevent us from taking the next steps – provided we want to. Neither will the Volkswagen works council stop us." A slap in the face for Bernd Osterloh – who has taken the matter to a court in Stuttgart court. The VW shareholders' meeting saw Porsche adding pressure in the power struggle. There are calls for an end to the special protection enjoyed by Volkswagen under German law, and the veto privilege held by the state of lower Saxony. The state premier expressed his opposition and his solidarity: "... that a regional government and a works council see profits and jobs as equally important. And that the regional government is itself seen as a guarantor, that job concerns are a big issue." A partial success for Bernd Osterloh – certainly grounds for hope. There's a lot at stake: "Looking at the agreement, it's clear that Porsche wants to control us ... and that Porsche is not concerned about appropriate participation of the VW workforce." He is prepared to take the case to the European Court of Justice. The fight for Volkswagen might be a protracted one.

DW-World | April 29, 2008

Tags:. .status. .influence. .except. .amounts. .minority