Volkswagen must act now, controlling families say as investments suffer
Volkswagen Faces Urgent Calls for Action Amid Financial and Competitive Pressures
By Rachel More
Controlling Families Urge Immediate Steps
BERLIN, Aug 7 (Reuters) - Volkswagen must act now to secure competitiveness, the German auto group's controlling families said on Thursday, in their clearest message yet to management amid a push to ramp up cost cuts and fend off Chinese rivals.
Speaking as Porsche SE, the investment vehicle of the Porsche/Piech auto dynasty and Volkswagen's top shareholder, announced its half-year financial results, its board chairman Hans Dieter Poetsch said the Volkswagen group "is at a historic crossroads".
Leadership's Call for Responsibility
"For the sake of the company and its sustainable competitiveness, everyone must now step up and take responsibility," Poetsch said.
"The longer decisions are delayed, the bigger the problems will become," he added.
VW Battling Rising Costs and Competition
VW BATTLING RISING COSTS, COMPETITION FROM CHINA
Volkswagen CEO Oliver Blume has pledged to drastically overhaul the group, which also includes the VW mass-market business and premium brand Audi, as it battles high costs, tariff woes and intensifying competition from China.
Cost-Cutting and Restructuring Plans
Porsche SE finance chief Johannes Lattwein called on the group to reduce excess capacity, significantly lower costs and strengthen decision-making.
Having already overseen tens of thousands of job cuts, Blume's latest restructuring plan threatens another 50,000 layoffs and the possible closure of four German plants.
Labour and Political Hurdles
The plan still needs the blessing of powerful labour representatives and the state of Lower Saxony, which has a 20% blocking minority, setting the stage for tense talks in the second half of the year.
Sources told Reuters that the labour side and Lower Saxony voted against Blume's plan at the last supervisory board meeting in July.
'Every Option' Must Be Considered
'EVERY OPTION' MUST BE CONSIDERED
Lattwein said Porsche SE supports Volkswagen's management and its proposals, adding, "Competitiveness is the goal. Every option must be considered in pursuing it."
Financial Performance and Shareholder Impact
Porsche SE reported a 14.5% drop in its adjusted half-year earnings after tax to €949 million ($1.1 billion) on Friday.
It owns 31.9% of Volkswagen and 12.5% of Porsche, the sports car subsidiary that bears the family name.
Shares in both companies have fallen sharply in recent years.
Exchange Rate and Reporting Credits
($1 = 0.8678 euros)
(Reporting by Rachel More, Simon Ferdinand Eibach and Emanuele Berro; Editing by Milla Nissi-Prussak, Thomas Seythal and Jan Harvey)
