Volkswagen executives face down angry shareholders at agm

Top Volkswagen managers faced down 3,000 angry shareholders at a tempestuous annual general meeting in Hanover on Wednesday, the first since the car group was engulfed last September by an emissions manipulation scandal.

Chief executive Matthias Müller and supervisory board head Hans Dieter Pötsch apologised to shareholders for betraying their trust and cheating customers by producing 11 million cars with diesel engines manipulated to appear more environmentally friendly than they were.

"This misconduct goes against everything that Volkswagen stands for," said Mr Müller of the scandal, which spread right through group from Volkswagen and Porsche to Audi and Seat, and saw share prices plummet by around 40 per cent.

Mr Müller, chief executive since last September, asked shareholders for a second chance: to clean up after the diesel scandal and to reform VW to make it fit for the future with electromobility, internet-based mobility, self-driving cars and greater brand autonomy. In an interview ahead of the AGM, Mr Müller hinted that VW might abandon diesel engine technology entirely.

Crisis

“Volkswagen is more than this crisis, it has qualities that haven’t disappeared overnight,” he told Tuesday’s meeting in Hanover. “We cannot undo the past, what we have in our hands is to deal with it responsibly.”

Supervisory board head Hans Dieter Pötsch attracted the ire of agm attendees in Hanover, with many questioning his ability to help clean up a scandal that took place while he was VW finance head. Angry VW investors accused him of “sh*tting” them and of being a “personified conflict of interest”.

Outside the meeting, protestors mocked the group’s corporate euphemism for the emissions manipulation -- the “diesel theme” - and attacked German plans to subsidise motorists to buy electric cars - including from VW. One read: “No relief for environmental criminals! Those responsible and the profiteers should pay.”

Prosecutors

Ahead of the agm, German prosecutors said they were investigating former VW chief executive Martin Winterkorn and Herbert Diess, in charge of the VW brand. In addition, Germany's financial regulator BaFin says it is investigating the entire old supervisory board under suspicion of withholding market relevant information about emissions manipulation.

Nine months after the news broke, the VW share price has recovered from crisis lows but is still around a quarter below its pre-scandal levels. Group finances are also weak after setting aside €16 billion to cover the cost of fines and engine fixes. The scandal has pushed the company into the red for the first time in two decades, with a net loss of €1.6 billion.

But Hanover’s agm meeting was more a chance for small shareholders to let off steam than force any major changes at the automotive group. Just 11 per cent of VW voting rights are in their hands: 52 per cent of voting rights lie with the founding Porsche-Piech families, 20 per cent with the state of Lower Saxony and 17 per cent with Qatar.

Hessa Al Jaber, speaking in Hanover for Qatar, gave a vote of confidence in the VW management.

“Volkswagen is capable of change,” she said. “Problems make one stronger.”