Workers at Volkswagen have lost their legal attempt to stop Porsche establishing a European holding company in a move that sets the scene for the next big struggle at Europe’s biggest carmaker, the FT reports.
The newspaper said that battle lines have already been drawn between VW’s workers – who historically have been the highest paid and least productive in the auto industry – and Porsche, VW’s biggest shareholder that is heading towards a majority shareholding.
The FT said that Porsche appears keen to curb the power of IG Metall, the engineering union to which most VW workers belong.
The court decision paves the way for Porsche to incorporate a holding structure next month using the form of the European Company, or Societas Europaea.
The sports carmaker’s executives want to set up an SE to ensure that when they take a stake of more than 50 per cent in VW – as they are expected to do early next year – their governance structures will not be swamped by the far bigger carmaker.
In particular, Porsche is anxious that there should be parity between its own labour representatives and those of VW on the supervisory board of the holding company.
VW workers launched the lawsuit because they believe they should have more power, as there are 324,000 of them and only 12,000 employees at Porsche. Without the SE structure, VW would be likely to claim all the labour seats on the board instead of the 3-3 split Porsche plans.
This has led to leading worker representatives at Porsche and VW clashing in public as well as infighting at IG Metall. VW is the main stronghold for the big engineering union and it fears a loss of influence there could affect its image nationwide.
But Porsche officials believe the dispute is somewhat overblown as the holding company will make decisions about Porsche’s investment. VW’s own supervisory board – where VW workers hold half of the 20 seats – will remain competent for all decisions about the carmaker.
A restructuring last year ended the infamous four-day week and brought some labour cost savings that should help VW announce strong third-quarter results on Friday. But VW’s workers remain among the most cosseted in the industry.
The FT added that VW directors point to the difference in opinion between Wendelin Wiedeking, Porsche’s chief executive, who has made aggressive comments about curbing union power, and Ferdinand Piëch, VW’s chairman and a Porsche shareholder, who rose to power with the strong support of the unions.