Filed under: Etc., Euro, Porsche, Volkswagen
Porsche stake in VW unlikely to change soon; a new "VW law" could return
The so-called "VW law" was struck down by the European Court last October. Previous to that, the state of Lower Saxony was able to veto any Volkswagen shareholder action it didn't like. When the law was struck down it looked like the Lower Saxony had no choice but to watch Porsche, which had been circling shark-like around Volkswagen for a bit, decide on the day it chose to take majority control of the much larger company.
But Lower Saxony had a much bigger shark on its side in the form of the government in Berlin. Politicos in the German capital have been drafting a law that would "replace" the "Volkswagen law" and put Lower Saxony, with its 20.1-percent holding in VW, back in effective control of the company. The law still has hurdles to overcome, such as approval by the German parliament and then approval by the EU. Frankly, we don't see how the EU could approve the law if it artificially inflates the state's position over that of a shareholder. Porsche is going to wait for the law, and elections in Lower Saxony, to run their courses before proceeding with its efforts to take a majority stake. Der Saga continues.
[Source: Automotive News - Sub. Req.]
Reader Comments (Page 1 of 1)
AMcA 8:49PM (1/29/2008)
I hope they succeed in holding off Porsche for one reason:
Porsche reportedly wants to kill off Bugatti.
I want Bugatti to survive, and I want them to build that little lightweight roadster they were talking about. I'd pay handsomely for one.
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Arthur 11:12AM (1/30/2008)
Bah. I'd rather see Porsche succeed. VW has serious quality issues. Anecdotally, everyone I know who's owned one has agreed, and I even know a few VW employees who say they don't know why anyone buys their cars. The only people who *do* like VW seem to be a few brainwashed trolls who come onto autoblog. I used to be sympathetic towards VW. After all, it's the people's car of Germany, and I have to admit that they look kinda cute (except for the Beetle, that car just looks silly). Of course, then I rode in a Touareg...
VW *can* do well. Much of the underlying engineering is solid. Their cars have good handling. Their engines often sound raspy or just downright hilarious, but ultimately they perform well. All they have to do is start paying attention to detail and polish (not just style wise) and stop trying to turn their cars into push-button electronic tinker toys. Oh yea, and designing the electrical system so that it's not so damn fragile would help too. They just need some *real* management.
Nicole 3:31AM (1/30/2008)
It would be "Die Saga"...
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rgseidl 7:15AM (1/30/2008)
This article was poorly researched IMHO. Only the left-leaning SPD, one of two equal partners in Berlin's grand coalition, really favors salvaging as much of the old Lex VW as the EU court's ruling will allow. The CDU is decidedly lukewarm about this, so expect any new law to be a great deal less statist than the original was.
The primary issue being discussed right now is if union representatives should retain the right to block the relocation of assembly plants, presently a hot topic in Germany in light of Finnish mobile phone giant Nokia's recent decision to shutter an assembly plant in Germany in favor of a new one in Romania. By contrast, Porsche has stated many times that it is committed to keeping production in Germany and, to increasing capacity utilization at the giant Wolfsburg plant specifically. It just doesn't want to let the bolshy local branch of the IGM union continue to dominate corporate decision making at the VW brand, as it has done for decades.
Moreover, the state of Lower Saxony just held an election in which voters confirmed CDU moderate Christian Wulff's coalition with the free-market FDP. Wulff does care about job security in his state and will hold on to its 20.1% stake in VW, but after some friction with Ferdinand Piech, he now favors Porsche's investment.
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Spankee 8:13AM (1/30/2008)
Well, if MCI Worldcom and AOL Time Warner taught us nothing it's that a smaller company buying a much larger company always works fabulously.
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