Germany’s Volkswagen AG, the second largest automaker in the world and the biggest in Europe, should first gain a new structure before considering to secure a permanent chairman, according to the powerful labor head of the company.
The automaker has been shaken because of the leadership crisis that led to the resignation of ling-running chairman Ferdinand Piech, the corporate scion that for more than two decades has balanced the interests of shareholders and worker leaders within the company. The consensus among analysts and investors is that a strong chairman would be needed sooner than later to support chief executive officer Martin Winterkorn as he fights the company’s issues – among them the continued low profitability of the namesake VW brand, which only had an operating margin of two percent during the first three months of the year.
Piech had to resign his commission back in April and since then the labor leaders have been trying to secure more influence over the company’s plans, in a bid to continue its focus on increased production efficiency, but without any losses to the worker base. “We want to first have a debate about the company structure, then we can talk about a supervisory board chair,” commented Bernd Osterloh, the leader of VW’s works council. CEO Winterkorn has pledged to come up with a new company structure by October after he was saved by the support shown by the labor leaders and the State of Lower Saxony, a major stakeholder. Employee representatives have control over 50 percent of the positions on VW’s supervisory board and the state has another two seats, meaning they have the power to approve or veto any chairman.