Porsche Vs. VW Soap Opera: All My Workers

In the ongoing drama between Porsche and Volkswagen, the MSM tends to forget that this is also a tale of two unions. Volkswagen is organized, not to say owned, by the German metal workers union, IGM. With 2.3 million members, IGM is the single biggest union in the world. Half the VW supervisory board belongs to the unions. In case of a deadlock, the decisive vote lies with the stockholders. The unions can also count on the state government—with its blocking minority vote— being “sympathetic” towards their suggestions. Porsche has their own union representation: The Porsche Workers’ Council. So just as we’ve got Porsche – Piech battle royale, there’s an IGM vs. Porche Workers’ Council cage match. Let the games begin! Or, uh, continue.

On one side stands Uwe Hück, chairman of the Porsche Workers’ Council and former European Thai Boxing champion. On the other, we have Bernd Osterloh, who only looks like a former Thai Boxing champion. Osterloh represents Volkswagen‘s workforce. He’s the man who profited from the hooker scandal that shook Germany three years ago, when Volkswagen management tried to get the Union members on the supervisory board into a more sympathetic mood by paying for amusement trips to South America (mainly because Osterloh couldn‘t be linked to any of it, but there you go).

The troubles began early on, when Porsche decided to take over Volkswagen The company needed a new legal framework for Volkswagen. So they created the Porsche Automobil Holding SE, which now holds 100 percent of the Dr. Ing. h.c. F. Porsche AG as well as 51 percent of Volkswagen. As always, half of the supervisory board of the newly founded holding went to the unions. Porsche’s Uwe Hück negotiated the allocation of these board members with Porsche CEO Wendelin Wiedeking. As a result of these talks, the unions claimed 10 seats, divided evenly between the Porsche and VW unions.

Though no queen, Bernd Osterloh was not amused. He figured that the fact that Volkswagen employs almost 30 times as many workers as Porsche should be somewhat represented when it comes to the allocation of board members. Osterloh took Hück and Wiedeking to court.

Porsche won round one. The court ruled that since Porsche only held a minority of Volkswagen at the time the Holding was formed, they didn‘t need the approval of the Volkswagen workers. This did nothing to improve the relations between Volkswagen and Porsche and their respective workers. Osterloh told the press that Wiedeking had “dangerous phantasies of almightiness“ and that he wants to rule “with the arrogance of an autocrat.“

The next time the Volkswagen board met, the Porsche workers organized huge protests against the board members. With a little help from everyone’s favorite Satanic mechanic (VW’s Ferdinand Piech), Porsche subsequentally lost their votes on the board. All of them.

The power shift towards Wolfsburg leaves Bernd Osterloh is more powerful than ever. He’s made it clear that any merger would only receive his blessing if the workers‘ participation and the so-called “Volkswagen Law” remain unchanged. In other words, the status must remain quo.

Osterloh openly calls Porsche’s management “dilettantes“ and “nouveau-riches“ from Stuttgart. Obviously, the kind of merger that Osterloh has in mind is in reality a takeover of Porsche by Volkswagen. This pleases his counterpart from Stuttgart not one bit.

Nor was Uwe Hück happy when Piech and Osterloh dropped some unfavorable remarks about Porsche. The VW duo claimed Porsche is overleveraged, running out of cash and worth several billion less than the €11 billion the press has been talking about lately. In Piech‘s case, this could be seen as infringement of the stock corporation law, as he also sits on the Porsche supervisory board as a major shareholder.

Hück is threatening to drag Pieh and Osterloh into court. Meanwhile, Hück reckons Porsche should remain independent. The company is doing just fine, thank you very much. What’s more, Porsche workers stand behind the automakers CEO Wiedeking, whose contract expires in 2012.

On Sunday, we witnessed the latest installment of this soap opera. Volkswagen called off any negotiations with Porsche regarding the merger until further notice. It was Osterloh who initiated this move, who later told the press that he‘s missing the transparency on the part of Porsche needed for talks to succeed. Obviously, Osterloh wants to increase the pressure on Porsche and Wendelin Wiedeking, who‘s still looking for outside investors to help him take over Volkswagen.

Today we‘ll see the next episode. The supervisory board of Porsche is meeting in Stuttgart. Uwe Hück has already announced that there will be massive protests by the Porsche workers against Ferdinand Piech. Even so, as we’ve seen in other editorials on this site, anyone who bets against Piech does so at his own peril. Somehow, the man always seems to get his way. We shall see.