VW’s controlling family pledges to protect jobs in their first direct comments to workers since it cheating on pollution tests became public.
|||Wolfsburg - Volkswagen’s controlling family pledged to protect jobs in their first direct comments to workers since the carmaker’s cheating on pollution tests became public more than two months ago.
Wolfgang Porsche, head of the family that owns a majority stake in the carmaker, threw his support behind CEO Matthias Mueller and vowed a thorough investigation into the scandal in an address to about 20 000 employees at Volkswagen’s biggest factory, in its headquarters city of Wolfsburg, Germany. He was flanked by other supervisory board members who represent the reclusive clan: Louise Kiesling and Hans-Michel Piech.
“The Porsche and Piech families support job security at Volkswagen through a stable and successful company,” said Porsche, who is also chairman of the family investment vehicle Porsche Automobil Holding. “We know jobs are an invaluable asset. And this asset can’t simply be gambled away.”
Union leaders had asked the family to signal their commitment to workers, who face two weeks of forced leave during the Christmas holidays as the crisis begins to affect sales. Labor chief Bernd Osterloh, who has pushed to shield staff by focusing cutbacks on Volkswagen’s model portfolio, hosted the assembly.
Mixed news
The gathering comes amid mixed news for Volkswagen. Though the company has made progress toward a simpler-than-expected recall of 8.5 million rigged diesel cars in Europe, talks with US regulators are still ongoing as plummeting sales in the country show the effect of the crisis on the showroom floor. The financial impact, which the company has said will total more than 8.7 billion euros ($9.24 billion), is also uncertain.
The shares fell 4 percent to 124.95 euros at 1:12 p.m. in Frankfurt. Volkswagen has lost more than 10 billion euros in market capitalisation since its cheating became public September 18.
Standard & Poor’s downgraded Volkswagen’s credit rating on Tuesday for the second time since the crisis became public. “These risks and related costs continue to expand and deepen,” especially after the November revelations of misrepresented carbon-dioxide emissions in Europe, the rating company said.
Family support
“The Porsche and Piech families stand by Volkswagen,” Porsche said at a gathering with the mayor of Wolfsburg on Tuesday evening. “I am deeply convinced that Volkswagen will weather the current difficult situation,” and “I will personally do my part.”
His reticence prior to Tuesday was true to form. The soft- spoken 72-year-old was thrown into the forefront earlier this year, after his cousin, former Volkswagen Chairman Ferdinand Piech, resigned in a boardroom fight with then-CEO Martin Winterkorn. Wolfgang Porsche was the last of the company’s power players to weigh in behind Winterkorn in that struggle, holding off on entering the fray until after consulting with other family members.
Unlike Piech, who spent his career in boardrooms, engineering centers and assembly halls, Porsche has mostly lived quietly in Austria, spending time in Salzburg and the Alpine town of Zell am See. There he has an organic dairy farm.
Low profile
Much of the rest of the 30- to 40-person family also keeps a low profile, living around the border of Germany and Austria. They control 52 percent of Volkswagen’s voting stock through Stuttgart-based Porsche Holding, a relic of sports-car maker Porsche’s ill-fated attempt to take over much-larger Volkswagen. The bigger company turned the tables in a complex transaction that ended with an agreement in 2009 to have the Porsche-Piech family as anchor shareholder, while the sports-car operations were integrated into Volkswagen’s stable of brands.
The family’s silence has exacerbated insecurity among workers as evidence grows that the emissions manipulation is starting to hurt sales. Volkswagen’s US deliveries dropped 25 percent in November.
The carmaker is putting production in Wolfsburg on hold for two weeks over Christmas to avoid bloated inventories. The factory is VW’s largest and one of the biggest car-manufacturing locations in the world. It produced about 840 000 vehicles last year, but sustaining output could be a struggle if demand continues to slide.
BLOOMBERG
