The Porsche-Piëch family, Volkswagen's majority owner, is pushing for the closure of several German factories despite opposition from the powerful works council. Tensions are high as negotiations over cost cuts and wage agreements continue.
The billionaire Porsche-Piëch family, Volkswagen ’s majority owner, has taken a hardline stance in backing the company’s plans to close several German factories, as the threat of diminished dividends looms. Lack of progress on the restructuring, initially announced in September, has become a growing concern for the Porsche-Piëch family, which has reversed its traditional stance of avoiding confrontation with VW’s powerful works council.
According to one person briefed on discussions at recent supervisory board meetings, the family has “made clear that it is necessary to rightsize the business in order to achieve long-term competitiveness”. VW has argued for the closure of plants in Germany as its European sales have fallen sharply. However, the company’s works council, which controls half the seats on the company’s supervisory board, has promised workers that not a single German plant will be closed. Another person with knowledge of the discussions said it was “hardly surprising” that the Porsche-Piëch family had different priorities than some other supervisory board members, especially the works council and its ally, the state of Lower Saxony, which holds 20 per cent of VW’s voting rights. Worker representatives have argued that while cost cuts might support profit margins in the short term, they will do little to address sliding sales in both Europe and China, the company’s most profitable market. Executives at Europe’s largest carmaker have spent weeks locked in tense negotiations with representatives of German workers, who have already downed tools twice in the past month amid fierce disagreement over planned cost cuts. VW’s management and unions are eager to wrap up formal wage negotiations before Christmas. After 36 hours of continuous debate, the fifth round of talks broke off briefly on Wednesday morning with both sides agreeing to resume negotiations later in the da
Volkswagen Porsche-Piëch Family Plant Closures Restructuring Labor Negotiations
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