VW Unions Want 3% Voting Stake; May Start Building Stake In 2011

Volkswagen AG's (VOW.XE) labor unions want to take a voting stake of up to 3% in the company to safeguard workers' rights at a time when Europe's largest auto maker by sales is pursuing a global expansion plan to overtake world leader Toyota Motor Corp. (7203.TO) by 2018.

"We want Volkswagen's staff in the future to be able to exert its influence at shareholder meetings through a voting stake of two to three percent," Volkswagen's top labor representative and deputy supervisory board chairman, Bernd Osterloh, told Dow Jones in an emailed statement.

"We're optimistic that we (can start building) a stakeholding in the course of this year," he said.

Osterloh said the preparations for meeting all legal requirements had almost concluded and talks about the implementation are due to start soon.

The financial details as well as terms and conditions will be subject of talks with Volkswagen's management. A voting stake in Volkswagen of 3% would be worth roughly EUR980 million.

A spokesman for Volkswagen wasn't immediately available for comment.

The plan to take a substantial stake in the company reflects growing confidence among labor unions, which traditionally have had a strong influence at Volkswagen, as the Wolfsburg-based company is on track for a new sales record in 2011, driven by booming demand in China, Brazil and Russia.

Volkswagen is investing heavily in expanding production capacity in emerging markets as part of its global expansion plan and it opened a new U.S. plant in Chattanooga, Tenn., last month.

Reports about plans to shift some production of best-selling models such as the Tiguan or the Golf abroad has sparked anger among German labor unions in recent days.

At 0958 GMT, Volkswagen's common stock, which carries voting rights, traded down EUR2.35 at EUR111.15.

Volkswagen's common shares were replaced by the company's preference shares in the blue-chip DAX-30 index in December 2009 after the common stock's free float fell below the 10% threshold. Volkswagen's preference shares don't carry voting rights.

A 3% voting stake would make Volkswagen's employees the company's fourth-largest shareholder after Porsche Automobil Holding SE (PAH3.XE) with a 50.7% stake, the German state of Lower Saxony with just above 20% and Qatar Holding LLC with 17%.

The deal would be based on a plan drafted in August 2009 after Volkswagen's labor unions in a joint effort with the company's management successfully averted the takeover launched by Porsche's former chief executive, Wendelin Wiedeking, and former chief financial officer, Holger Haerter.

On Aug. 13, 2009, Volkswagen's supervisory board rubber-stamped a plan to forge a combined company with Porsche after the Stuttgart-based sports car maker's attempt to gain control of its much-larger peer backfired when credit markets dried up.

Volkswagen's board stated at the time that it would be willing "to offer a substantial investment opportunity to the world-wide employees."

Osterloh said it hasn't been decided yet through which legal form the labor representatives could take the stake in the company.

-By Christoph Rauwald, Dow Jones Newswires; [phone]; [e-mail]