Volkswagen’s supervisory board will decide next month whether to extend Chief Executive Bernd Pischetsrieder’s contract, a source familiar with the matter has told Reuters.

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“There is no point having an unnecessary fight,” the source told Reuters before a two-day board meeting starting on Wednesday.


The meeting will address Pischetsrieder’s far-reaching and politically extremely sensitive cost-cutting plans.


Pischetsrieder’s status may come up at the board meeting on Wednesday or Thursday, but a final decision will be made only shortly before the group’s annual meeting in May, the source told Reuters.


The Volkswagen supervisory board is reportedly split on renewing the CEO’s contract, with workers’ representatives opposed to an extension beyond 2007 while shareholders’ representatives favoured keeping him on.

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Pischetsrieder has proposed restructuring measures to reduce overcapacity which could put 20,000 jobs at risk, provoking the ire of Germany’s strong trade unions.


In Germany, and at Volkswagen in particular, employee representatives have a big say in the strategic decisions of the company. On the supervisory board, staff representatives and shareholder representatives each have ten seats.


Pischetsrieder has been with VW since 2002 after he lost the top job at BMW following the botched acquisition of Britain’s Rover Group.


Earlier this month it was reported in the German press that the head of GM Europe, Carl Peter Forster, was in discussions with Volkswagen over taking the top job following Pischetsrieder’s planned exit. GM Europe said that Forster has no plans to leave GM Europe.


The next meeting of the VW supervisory board is scheduled for May 2.