Porsche will delay upping its shareholding in Volkswagen following the dispute with the VW works council and the rise in the Volkswagen share price.

According to the Spiegel news magazine, Porsche had planned to raise its stake in the company from 31% to 50% in January 2008. The Volkswagen works council is concerned that when this happens, a new Porsche holding company, set up under European law, Porsche Holding SE, would not give Volkswagen's workrforce the equivalent representation when it comes to making major business decisions as it has enjoys now. The argument has led to a stand-off between Porsche management, and the Porsche works council, with Bernd Osterloh, the head of the Volkswagen works council, determined to get changes made to the new structure which otherwise could stand for 10 years.

The Spiegel report suggests that there is some irritation at Porsche headquarters in Stuttgart that Volkswagen's management has not stepped in to sort out the disagreement, and that it is hiding behind the works council, because it, too, is unhappy with the way that Porsche is stealing the initiative.

Another possible reason for the delay is the rise in the Volkswagen share price. Porsche does have some options to buy shares below the current price, but finance chief Holger Härter would prefer to wait until the share price falls.

Separately Automobilwoche reported that the Volkswagen works council is seeking a compromise on the issue of co-management, as long as the Porsche works council, represented by its leader Uwe Hück, also compromises. At present plans call for three Porsche and three Volkswagen workers representatives to be on the board of Porsche Holding SE, out of a total of 12 board seats. The Volkswagen works council is unhappy with this as it represents 324,000 workers, compared to Porsche's 11,400.