While VW's chief executive has made it clear he welcomes Porsche's takeover proposal, employees believe it will weaken union influence, writes Derek Scallyin Hamburg
THE TAKEOVER of Volkswagen, Europe's largest car company, by Porsche is all over - bar the shouting. And there was plenty of shouting yesterday at what was probably VW's last annual general meeting as an independent company.
Outside the meeting, more than 1,000 whistleblowing VW employees protested against a deal they fear will weaken the traditionally strong union influence at the company.
Before banners reading, "With us: everything; against us: nothing", VW labour leader Bernd Osterloh attacked what he called the "arrogant, autocratic" approach of Porsche to the deal.
The luxury car company already owns at least 31 per cent of VW and has warned that there will be no "sacred cows" when it completes a full takeover.
Inside the Hamburg conference hall yesterday, VW chief executive Martin Winterkorn made it clear that he welcomed the Porsche takeover proposal. He presented figures revealing a record 6.2 million vehicles were delivered last year, with 2008 first-quarter profits up 28 per cent on last year to another record of €1.36 billion.
By far the largest growth market was China, up 28 per cent, while the home market shrank by 4.8 per cent.
Healthy figures like that - the result of painful austerity measures - make it difficult for VW managers to explain the need to sell to Porsche.
From the verge of bankruptcy in the 1990s, Porsche is now the most profitable car company in the world. Union leaders say the rebound came at the price of union co-determination and warn that a corporate culture clash is inevitable between VW and Porsche.
But VW managers say a closer relationship with Porsche is necessary if they are to achieve their ambitious goal of stealing Toyota's market-leader crown within the decade.
Most of the VW shareholders at the Hamburg meeting yesterday seemed resigned if not thrilled about the suitor.
Helmut Becker (75) worked for VW for 52 years, starting in 1949. He is happy to accept Porsche's assurances that VW is a long-term investment, particularly as his 2,500 ordinary shares have quadrupled in value during the courtship to almost €500,000. He sees the deal as the crowning achievement of VW supervisory board chief Ferdinand Piëch.
"When I first met him, he was a humourless man of 25 and he still is humourless," says Becker. "But he is also a technical genius. The turbo diesel is his work, but this deal beats even that."
Porsche management has already created a new holding company that, when the deal is completed, will include mass-market brands such as Seat, Skoda and VW, as well as luxury brands such as Audi, Lamborghini, Bentley and Bugatti.
The final obstacle to full Porsche control of VW is the state of Lower Saxony, which holds a 20 per cent blocking minority stake under the so-called "Volkswagen law". Six months ago, the European Court of Justice declared invalid parts of that law which limit outsider board influence to 20 per cent at board level, regardless of the actual share holding.
After losing a longrunning battle to preserve the entire "Volkswagen law", the German government is now trying to salvage parts of it, risking another confrontation with Brussels.
"We Germans want to have our cake and eat it - do business elsewhere but block others here at home," says VW shareholder Heinz Ernst. "We want fat profits from the capital market and, at the same time, the cosy comfort of Rhineland capitalism. But most people here realise times have changed. You can't have it all; we'll back Porsche."
