Volkswagen AG's top labor leader criticized efforts to rescind a law protecting Europe's largest carmaker from a hostile takeover, putting him in opposition to Porsche AG, the company's biggest shareholder.
„This is not just an affront to Volkswagen's workforce,” Bernd Osterloh, Volkswagen works council chief, said in a speech yesterday at the carmaker's headquarters in Wolfsburg, Germany. „It also massively impacts our social market economy, which is based on reaching societal consensus.” Germany's so-called Volkswagen Law protects the carmaker from takeovers and caps shareholder voting rights at 20% regardless of the size of the stake. The law also gives any investor with a 20% stake veto powers over major decisions, such as factory closings and capital increases. Porsche CEO Wendelin Wiedeking, whose company has a 27.4% stake and board approval to raise it to 29.9%, has said he supports abolishing the rule as he seeks more say in Volkswagen's management. „Porsche knew about the law before buying into Volkswagen,” Osterloh. „Therefore, we find Mr. Wiedeking's statements astonishing that the VW Law should be abolished.” The European Court of Justice in Luxembourg will publish an advisory opinion tomorrow on whether to strike down the law. The court, which generally follows its advocates-generals' advice, is expected to maker a final ruling in the next six months.
The European Commission, the EU's Brussels-based regulator, said in a December 12 court hearing that the legislation restricts the free movement of capital, comparing the law to special holdings, or golden shares, that some countries hold in former state monopolies. The court has agreed with the regulator in such cases in the past and forced countries including France, the UK and Spain to give up these powers. In the event the rule is overturned, a shareholder would need at least 25% of Volkswagen's stock to have a blocking vote, instead of the current 20%. That would give Porsche veto power and eliminate the blocking vote now held by the German state of Lower Saxony, Volkswagen's second-largest shareholder. Lower Saxony, where Volkswagen is based and has four of its factories, has a holding of about 20%. Lower Saxony Prime Minister Christian Wulff has said he supports retaining the law. Porsche has „no direct comments regarding what Mr. Osterloh said today,” Michael Baumann, a company spokesman, said in a telephone interview. He reiterated Porsche's objection to the law on the grounds that the shares owned should correspond to the owner's influence. (Bloomberg)