Porsche supervisory board chief, Wolfgang Porsche, has criticised Volkswagen's corporate strategy, justifying workers' fears that a takeover by Porsche will lead to massive job cuts.

In an interview with Manager magazine, Porsche said that there is a lot of work to do at Volkswagen and that "the left hand does not know what the right hand is doing". He criticised the amount of competition between Volkswagen brands and said that Volkswagen should "look for competition outside the company, and not within its own company".

Volkswagen group CEO, Martin Winterkorn, dismissed the criticism, citing recent record financial results, according to dpa.

Porsche is Volkswagen's largest shareholder and has plans to raise its shareholding from 31% now to more than 50% by the autumn. But it is fighting to reduce the power of workers' representatives, and Volkswagen's second largest shareholder, the state of Lower Saxony. Both want to protect German production locations and jobs at existing plants, and are fearful that Porsche would relocate to lower cost locations.

The Volkswagen works council, led by Bernd Osterloh, has been fighting for increased representation on the Porsche holding company supervisory board, which will have effective management control over Volkswagen when Porsche takes majority control. Current plans give Porsche employees three seats on the board, and Volkswagen three, despite the fact that Volkswagen has around 324,000 workers to Porsche's 12,000.

Separately Porsche has mounted a legal challenge to the results of last month's Volkswagen shareholder meeting, which rejected Porsche calls to change the company's own rules, which require 80% of shareholders to support a decision for it to be agreed.

This gives Volkswagen's second-largest shareholder, the state of Lower Saxony, a blocking majority with its shareholding of just over 20%. Normal company rules in Germany allow major decisions to be carried with 75% shareholder support. These rules have been in force since the company was privatised in the 1960s and are also embodied in a special law, called the Volkswagen law.

The original law was ruled illegal by the European Court of Justice last year and a new law was agreed by the German government just this week. Porsche is continuing to fight against the new law and may gain some support from the European Union.

Charlie McCreevy, European Commissioner responsible for internal market and services, has said that, if the law remains as it is, the EC would have no choice but to take the German government to court.

Osterloh said that the interview given by Porsche does not help build trust. "The opposite is true: It confirms the fears of the last few months. It's about the future of VW," he said.

A regional trade union leader said: "The arrogance of Porsche is unbelievable. A successful cooperation is now acutely endangered."

Another trade union leader said that the opposition of Porsche to the new Volkswagen law shows that the sports car manufacturer wants to leave its options open for, for example, mass redundancies.