A Stuttgart court has ruled in Porsche’s favour in a dispute with the Volkswagen works council.
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The works council and its chairman Bernd Osterloh, argued that Porsche was effectively controlling Volkswagen as soon as it raised its stake in Volkswagen to 31%, and that it should therefore have been involved in formulating rules for the structure of the new Porsche Automobil Holding company where the VW shareholding now sits. Volkswagen workers are not represented on the company’s supervisory at present, and they are concerned that when Porsche increases its shareholding to more than 50% it will still only have three seats on the 12-member board. This is the same number as the Porsche works council, which represents substantially fewer workers.
The court ruled against the Volkswagen works council, which said that just because it ‘felt’ like Porsche was effectively in control, it did not mean it actually was in control. Osterloh is nevertheless taking his complaint to a higher court.
Separately Porsche has formally opposed the results of last week’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.
The Volkswagen rules are embodied in the so-called Volkswagen Law, which has been ruled illegal by the European Court of Justice. The German government is pushing for a new law that will support the state of Lower Saxony having a blocking veto, which would mainly serve to protect jobs in the region. Porsche now has four weeks to file a formal complaint.
