Lower Saxony's Prime Minister, who also sits on the VW supervisory board, describes how narrowly the company escaped an open power struggle - and makes a clear message to management.
Lower Saxony's Prime Minister Lies: Agreement at VW as "the beginning of a long, hard and in some places painful path". Photo: Bernd von Jutrczenka/dpa
Dusseldorf. Lower Saxony's Prime Minister Olaf Lies (SPD) commented on the agreement on the austerity package at Europe's largest car company Volkswagen on Wednesday. In a government statement to the Lower Saxony state parliament in Hanover, he said: âImmediately before the supervisory board meeting, we were faced with a path to escalation.â According to Lies, the Wolfsburg-based DAX group was threatened with âmonths of internal disputes and paralyzing self-employment.â
There were therefore new debates about factory closures and co-determination - âand in the end possibly also about the Volkswagen law and an extraordinary general meetingâ. This escalation was averted.
Lower Saxony holds 20 percent of the voting rights in VW. Lies sits on the car manufacturer's supervisory board together with his deputy Julia Willie Hamburg (Greens). The Volkswagen law ensures that the federal state has special influence over the group. When it comes to important decisions, Lower Saxony's veto is sufficient to prevent resolutions, which de facto gives the state a blocking minority. For example, decisions regarding the establishment or relocation of production facilities face particularly high hurdles.
Factory closures remain an issue
Last week, after months of negotiations, the Volkswagen supervisory board unanimously agreed on a new plan for the future. A decision on possible factory closures was initially postponed. Just like the question of whether the VW core brand and the components business will be separated from Volkswagen's group of companies.
According to the agreement, the board of directors should now present a concept for the group's factory network by the end of June 2027. Lies said in Hanover that not only German but all European works should be considered.
The two VW locations in Lower Saxony, Emden and Hanover, as well as the electric car factory in Zwickau and the Audi location in Neckarsulm are particularly under pressure. As things stand today, the board cannot guarantee âcompetitiveâ subsequent occupancy for any of the four factories for the years from 2031 to 2034. This means: The future of the locations is uncertain.
Lies also contradicted the statement that the supervisory board had decided to cut 50,000 specific jobs. Rather, the number is a calculated figure that the board derived from its cost and return targets. How much staff, sales, overhead costs and productivity will actually contribute to the savings still needs to be worked out.
At the same time, the Prime Minister increased the pressure on the board regarding the works issue. On the one hand, the agreement is âa great successâ. But also the beginning of âa long, hard and in some places painful pathâ. For the board, the future plan is ânot a blank checkâ. Management must now provide concrete measures and perspectives for the locations, said Lies.
Clarification at an extraordinary general meeting would have taken the conflict at Volkswagen to a new level of escalation. Internally, there was even talk of a final ânuclear optionâ in this context. Instead of resolving the dispute in the supervisory board, it would have been brought into the circle of owners.
That would have provoked a power struggle at Volkswagen. In addition to Lower Saxony, Porsche SE and Qatar are among the three largest shareholders and have two seats on the supervisory board. Porsche SE, which is controlled by the Porsche and Piëch families, holds the majority of voting rights in Volkswagen.
