The pressure on the shareholders of the German car industry group increased by families controlling Volkswagen, expressing their full support for the ambitious restructuring plan of the administration, which may lead to the abolition of tens of thousands of additional jobs.
On the occasion of the announcement of the financial results of Porsche SE – the investment vehicle of the Porsche and Pieh families, which is Volkswagen's largest shareholder – the company's supervisory board chairman, Hans Dieter Pets, stressed that the group «located at a historic crossroads».
«For the good of the company and its long-term competitiveness, everyone must now assume their responsibilities», said Petts, warning that «The longer decisions are delayed, the bigger the problems will become», reports Reuters.
Volkswagen is faced with increasing operating costs, the effects of trade duties and the increasing competition from the Chinese manufacturers, at a time when the global car industry is rapidly transforming.
The group's CEO, Oliver Blome, has pledged to proceed with a deep reorganization of Volkswagen, which includes not only the basic VW brand but also Porsche, Audi and Lamborghini. The aim is to reduce costs drastically and to strengthen competitiveness towards international competitors.
In the same wave, Porsche SE's financial director Johannes Latwein, who stressed that the group should limit overcapacity, significantly reduce its operating costs and speed up decision-making procedures.
Group CEO Oliver Blume
Another 50,000 redundancies are foreseen by Volkswagen
Since it has already moved on to tens of thousands of job cuts in recent years, the new phase of the restructuring that Bloome is promoting still predicts about 50,000 redundancies, as well as the possibility of closing four factories in Germany.
However, the implementation of the project is far from given. To proceed requires the approval of both the strong workers' representatives and the government of the state of Lower Saxony, which has a 20% share and a minority exclusion right in the company's decisions.
According to Reuters sources, both workers' representatives and Lower Saxony voted against Blome's plan at the last meeting of the supervisory board in July, presupposed difficult negotiations during the second half of the year. The next meeting of the council is expected in early September.
Volkswagen refused to comment on the information. The company's source, however, told Reuters that Porsche SE's statements were seen as clear support for the restructuring strategy that Bloome is promoting.
For their part, neither the employee council nor the IG Metall union, as well as the government of Lower Saxony, responded directly to Reuters's demands for comment. All three sides are represented on the Volkswagen Supervisory Board.
«Competitiveness is the goal and every option must be on the table to achieve», Latwein said features, confirming that Porsche SE supports management proposals.
Porsche SE, which holds 31.9% of Volkswagen and 12.5% of Porsche AG, announced that its adjusted net profits in the first half of the year decreased by 14.5%, to 949m euros.
Investors warmly welcomed the results, with Porsche SE's share retreating by about 1.5% after the announcements, while Volkswagen and Porsche shares remained almost unchanged in the first day's transactions. Both, however, have recorded significant losses in recent years.
Taking into account the impairments in the value of its two core holdings, Porsche SE recorded net losses of EUR 2.2 billion in the first half of the year, against net profits of EUR 338 million in the corresponding period of the previous year.
source: OT
