Germany Power struggle at Volkswagen World Socialist Web Site — Volkswagen Phaeton

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Volkswagen Phaeton

Published by the International Committee of the International (ICFI)

Germany: struggle at Volkswagen

“Resistance” to the EU

By Dietmar Henning

20 September

On Friday, September 12, 40,000 at the central Volkswagen auto in Wolfsburg demonstrated against the largest shareholder—the Porsche The Porsche group is working with the European Commission to social gains won by autoworkers in the within the framework of the so-called law.

The demonstration, called by the trade union IG Metall to with a meeting of the company’s board, was the largest in the company’s

IG Metall leader Bertold told the demonstration that the VW law be toppled, the way would be free for to dominate the VW supervisory board, and the of VW would be reduced to “puppets” in the of the Porsche executive committee. with us, is my response,” Huber and continued: “The VW law is a beacon of cooperation.”

The chairman of the German Union Federation (DGB), Sommer, also addressed the and declared: “The VW law must in order to ensure that VW

And finally, the VW factory council Bernd Osterloh, warned: off our VW law.” Every company have such regulations VW to guard “against the undiluted, domination of capital,” he said.

the VW law and the EU commission

The September 12 demonstration the latest stage in the struggle for at VW. VW has a total world workforce of including 170,000 employees in Since September 2005, the sports car manufacturer Porsche has acquired shares in VW and is currently the single shareholder with 31 One year ago, Porsche it planned to increase its share to 51 This process is due to be completed the next few weeks. The European commission has already approved the of VW by Porsche.

However, in order to secure a share in VW it is necessary for Porsche to the so-called VW law. This law was introduced in 1960 when the company was in the process of being and converted into a corporation. The law that both trade and the state retain substantial to determine the future of the company. In the Federal Republic and the state of Saxony (seat of the VW headquarters) retained 20 percent shares in the The remaining 60 percent was issued as on the stock market. Currently, the of Lower Saxony still a holding of 20.2 percent.

One of the important regulations of the VW law is contained in 2. This stipulates that no shareholder can control more 20 percent of the voting rights in the supervisory board—even if the shareholder’s exceed 20 percent. This important decisions—e.g. takeover or the closure of entire factories—to be The state, represented by Lower with its 20 percent share, veto power.

This has its roots in the history of Volkswagen. The was first formed in 1937 by the Socialists based on the demand by Hitler for the production of a “car for The company was then set up with the confiscated by the Nazis following smashing up and plundering of the German union movement in 1933. The use of labour during the war was a key factor in up the enterprise.

In 1960, the VW law was introduced as a to the trade unions in order to privatisation. The unions dropped opposition to privatisation in exchange for the to vote against any takeover of the by an overly powerful private

Until well into the VW workers were able to considerably better wages and conditions than other of industrial workers. All of this place within the framework of management-trade union participation (98 of VW workers are unionised, and their dues are deducted directly by to be passed onto the union) and led to the of a broad layer of privileged bureaucrats. They were to be as intermediaries between workers and and received handsome compensation in the

In the meantime, the forms of “participation” at VW become nothing more open co-management. The trade and works councils defend privileges by proving to management they are best situated to attacks upon the workforce. The extent of the corrupt relations trade unions, management and circles at VW emerged clearly in the of 2005 when it was revealed VW had sponsored luxury holidays, trips to the brothel for trade leaders—all at the company’s expense.

particular form of “German culture,” involving massive to the trade union and works has for many years been a in the eye of international investors and other big such as Porsche. The Porsche deliberately switched over to the Europea (SE—a society on European law governing share in order to overcome limitations down by the German model of relations.

At the moment, the VW law still an obstacle to the plans of Porsche. As is the with many major and financial investors, Porsche is the European Commission to undermine interests and social gains. In the few years, the European Union and the European Court of Justice repeatedly functioned as an instrument for the of neo-liberal policies in the interests of financial markets.


In the case of VW, the EU commission had already an ultimatum in March 2004 that Germany alter the VW law by the end of May particular, paragraph 2, which voting rights. The responsible at that time was Frits who regarded the VW law as a violation of the free of capital within the EU.

Following the of the German government to implement ultimatum, the European Court of (EuGH) ruled on October 23, that the VW law was incompatible with EU The EuGH stressed in its judgement employee protection rights did not any restrictions on the free flow of Germany was once again to amend or abolish the law.

The government responded by submitting a new of the VW law in May, which made concessions to the demands made by the but still gave the trade and VW works councils a right of over vital decisions the future of individual plants. In Bolkestein’s successor as EU trade Charlie McCreevy, announced week that he would oppose this new draft and it before the EuGH—entirely in line the wishes of Porsche.

“Resistance” to the EU

While VW workers were right to protest against by Porsche and the EU commission to abolish the VW they should not place any in their alleged allies. For workers, the issue is one of defending gains won during the past For the VW supervisory board chairman Piech, however, the VW law represents a of his own influence, while the trade and factory councils are eager to the law as the basis of their privileges.

Volkswagen Phaeton

In the course of the current dispute VW and Porsche, VW workers are being by the IG Metall to support the line of Piech and the VW board.

Involved in the over the VW law are two of the richest families in neither of which have any for VW workers. On one side is the Porsche which is majority-owned by the Porsche On the other side is Ferdinand who headed the VW executive committee 1993 to 2002 and now chairs the supervisory board, together his allies. Piech is also a of shares in Porsche, and both are closely related. Currently, the family controls more than the Piech family and is able to determine Porsche policy.

Piech can, also rely on the backing of IG and the company’s factory committees, led by Bernd Osterloh, as well as the government of Lower Saxony. have both supported in his dispute with Wendelin the chairman of Porsche.

Wiedeking, who determine policy at the new VW parent has announced that in future single auto produced bring in a profit. This is likely to lead to the closure of the erected factory in Dresden for the of the VW Phaeton, as well as the end of the company’s subsidiary Seat, which has sustaining losses for years. currently employs around workers.

The close cooperation between the VW works council and Piech Porsche and Wiedeking was evident at the held last Friday. and camera teams usually are not to attend internal meetings in the VW but last Friday, the media expressly invited to follow and on the protest meeting. According to reports, Porsche had sought to any participation by the media.

The Frankfurter Zeitung then wrote the close cooperation between the council chairman Osterloh and “Ferdinand Piech looks on the attacks on Wiedeking, some maintain he is assisting in such behind the scenes.”

For their Wendelin Wiedeking and Porsche can on the backing of the Porsche family as as the Stuttgart branch of IG Metall led by Baur, and the Christian Democratic-Free Party state government of

The chair of the Porsche works Uwe Hück, who last year Wiedeking’s annual salary of €60 has also spoken out against any arrangement for VW. Hück struck an with Porsche that the workers employed at Porsche receive voting rights in the VW company equal to those of the VW employees—representing a dramatic loss in for the VW trade unions.

The VW factory are vehemently opposed to such a of influence and have undertaken measures to oppose the deal. At the board meeting last IG Metall and works council at VW requested that future between Porsche and VW, such as the use of VW in Porsche models, should the agreement of the VW supervisory board. would limit Porsche’s in future and award Piech rights in the company’s control

The representatives on the employer side opposed to the union demand, and the vote fell to Piech. neglected to attend the meeting, thus enabling the union to secure a majority.

Wolfgang chairman of the Porsche supervisory and also member of the VW supervisory a cousin of Piech—reacted caustically: “I am with the voting tactics by the VW supervisory board chairman.” the Porsche clan is seeking to Piech as head of the VW supervisory

This dispute represents the chapter in the dispute for influence at VW two of the most powerful business and clans in Germany, Piech and The fact that individual councils and trade union line up with one or other of clans, while exploiting the company workforces for their own is further testimony to the right-wing of the unions.

VW workers must the line of the trade unions and a principled campaign to defend jobs and social conditions. requires the adoption of a genuine perspective and the struggle for a society places the needs of the working above the profit interests of and billionaire shareholders.

Volkswagen Phaeton
Volkswagen Phaeton
Volkswagen Phaeton
Volkswagen Phaeton
Volkswagen Phaeton
Volkswagen Phaeton

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