Volkswagen’s plans to close plants in Germany and nearly double planned job cuts to around 100,000 have put the spotlight on its unique governance and ownership structure that have drawn criticism from investors for years.
What is the Volkswagen Law?
The strong influence of workers dates back to the early days of Volkswagen before World War Two, when the Nazis built Volkswagen’s main factory in Wolfsburg with money that came in part from assets expropriated from trade unions.
This, and the use of forced labour, formed the financial basis of the company. After the war, the British, who were responsible for the plant at the time, decided to place trusteeship of the company in public hands.
Ownership Structure
Volkswagen has a complicated ownership structure, mainly because there are two different classes of Volkswagen shares: preferred stock that is listed in the German benchmark DAX index, and common stock which carries voting rights.
Most of the group’s equity, covering both share classes, is owned by Porsche SE, the investment vehicle of the Porsche and Piech families, which holds a 31.9% stake in Europe’s top carmaker.
The German state of Lower Saxony owns 11.8%, while Qatar holds 10%. When it comes to voting stakes, however, the picture changes: With a 53.3% voting stake, Porsche SE holds a majority. Lower Saxony has 20% of votes and Qatar 17%.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
