As Volkswagen's supervisory board heads into a key meeting Wednesday, the future of CEO Bernd Pischetsrieder and his aggressive ForMotion restructuring plan is increasingly in doubt.
Half of the supervisory board is made up of labor representatives, who are up in arms about Pischetsrieder's plan to cut up to 20,000 jobs at VW by 2008. Pischetsrieder's contract is up for a five year extension, and the labor reps want the restructuring plan watered down before they will consider approving his contract renewal. While the chief exec's contract extension won't be on the agenda this week, it must be decided one way or the other in time for a major shareholder's meeting in early May.
Labor costs at VW's German plants are among the highest in the industry, and implementing sweeping changes at these factories is a cornerstone of the company's restructuring plan. If Pischetsrieder is replaced by a more labor-friendly CEO, it's likely that VW's goal of tripling profits by 2008 will fall by the wayside, and investors will head for the exits.
[Source: Reuters]
Half of the supervisory board is made up of labor representatives, who are up in arms about Pischetsrieder's plan to cut up to 20,000 jobs at VW by 2008. Pischetsrieder's contract is up for a five year extension, and the labor reps want the restructuring plan watered down before they will consider approving his contract renewal. While the chief exec's contract extension won't be on the agenda this week, it must be decided one way or the other in time for a major shareholder's meeting in early May.
Labor costs at VW's German plants are among the highest in the industry, and implementing sweeping changes at these factories is a cornerstone of the company's restructuring plan. If Pischetsrieder is replaced by a more labor-friendly CEO, it's likely that VW's goal of tripling profits by 2008 will fall by the wayside, and investors will head for the exits.
[Source: Reuters]
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