Coverage: Volkswagen returns to headlines

Volkswagen returned to headlines over the weekend, after the management held meetings in Qatar with one of the automaker’s biggest shareholders.

The meeting comes just days before CEO Matthias Müller is expected to give an update on the company following its highly-publicized emissions scandal.

Jack Ewing, Graham Bowley and Melissa Eddy of The New York Times wrote about how the automaker is coping with pressure following its emissions scandal:

With Volkswagen’s emissions-cheating scandal nearing an important milestone — the chief executive this week is expected to deliver his first public update on VW’s internal investigation — some critics doubt Germany’s willingness to be tough on the automaker.

Earlier this year, Volkswagen admitted to installing “defeat devices” in more than 11 million diesel vehicles so that their engines temporarily ran cleaner when being tested for pollution. The scheme, exposed by regulators in the United States, has spawned investigations and lawsuits around the world.

One of the main European investigations is being conducted by the German Transport Ministry, although there is concern about government reluctance to take on one of the country’s most important companies — one that employs nearly 280,000 people in Germany and is a symbol of the nation’s economic success. Cars and trucks are the nation’s biggest export.

“I don’t have confidence it will be a tough investigation,” said Caren Lay, a leader of the Left Party, an opposition party that has been critical of VW’s crisis leadership but generally supportive of the automaker because of the company’s strong relationship with labor and unions.

At the same time, among the German public there are signs of resentment and skepticism toward the United States, where VW’s cheating was exposed. Even if Volkswagen cars were programmed to conceal their emissions of harmful nitrogen oxide, that view goes, America is still the land of gas guzzlers.

“There is this general notion that the U.S. is overstating the case in order to damage one of the major competitors of the U.S. carmakers,” said Nils Stieglitz, a professor at the Frankfurt School of Finance who studies corporate strategy.

A satirical video produced recently by ZDF, a publicly funded broadcaster, captured some of this sentiment.

The video begins with an announcer intoning, “We interrupt this broadcast for an official threat to autoland Germany from the United States of America.”

What follows is a montage of American pickup trucks splashing through mud bogs and spewing black smoke. There is a shot of women in bikinis firing guns, in line with stereotypes of Americans as lovers of weapons and big cars.

The announcer says sarcastically: “American cars — not manipulated. For the good of the environment.”

On Thursday, Matthias Müller, the chief executive of Volkswagen, is expected to present an interim report on the company’s internal inquiry. It has been nearly three months since the Environmental Protection Agency in the United States first announced VW’s violations. Mr. Müller has said previously it will take several months or more before VW’s internal auditors present their final conclusions.

William Boston of The Wall Street Journal described the company’s efforts to reassure some of its top shareholders:

Volkswagen AG said Sunday that its chief executive, chairman and top shareholders are in Qatar for talks with one of the company’s core investors, the Qatar Investment Authority, amid reports that the Qataris are calling for sweeping changes in the German car maker’s management.

Volkswagen is portraying the talks as a routine introductory visit by Chief Executive Matthias Müller and Supervisory Board Chairman Hans Dieter Pötsch, who assumed their posts in September.

They are joined by Wolfgang Porsche and Hans Michel Piëch, representatives of the Porsche-Piëch clan that controls Volkswagen, according to a person familiar with the matter.

“This is a normal introductory visit by the new management to one of the company’s most important partners, one of its most important shareholders,” Eric Felber, a Volkswagen spokesman, said.

Separately, Volkswagen confirmed that it has closed a deal for a €20 billion unsecured revolving credit facility with a consortium of 13 banks led by Citibank Global Markets and UniCredit Bank. A person close to the German car maker said the company wanted to assure it had access to funds, but has no specific plans now to tap the financing.

Andreas Cremer of Reuters explained how the company denied reports that it held meetings in Qatar to reduce the role of labor unions at the company:

Volkswagen has denied a report saying its chief executive and chairman were urged on Sunday by its third-largest shareholder to reduce the influence of VW’s powerful unions as it battles to overcome its emissions scandal.

CEO Matthias Mueller and Chairman Hans Dieter Poetsch met with leaders of the Qatar Investment Authority (QIA) in Doha on Sunday to discuss the state of investigations into its cheating of emissions tests, as well as VW’s new company structure and future business focus, two people familiar with the matter said.

Germany’s Bild am Sonntag newspaper, without citing sources, said earlier the QIA would use the meeting to demand a scaling back of the role of VW’s works council.

The council, whose representatives hold as many seats on the company’s 20-member supervisory board as shareholders, has long wielded great influence at the German company and has headed off cost cuts in the past.

“Co-determination (joint decision-making by corporate and labor representatives) and the (role of the) works council were not on the agenda of the talks,” said a VW spokesman, who earlier described Mueller’s visit to Qatar as communicating with “an important partner.”

The QIA, which holds a 17 percent stake in Europe’s largest automaker, declined to comment, as did VW’s works council.

Despite reports of the company wanting to curtail the role of labor unions, Volkswagen will soon negotiate against the UAW at its lone U.S. plant, according to Erik Schelzig of The Associated Press:

The United Auto Workers union has gained a significant first victory at a foreign-owned automaker in the South, easily winning a vote by skilled-trades workers at Volkswagen’s lone U.S. factory to have the UAW negotiate their collective bargaining agreements.

The workers who repair and maintain machinery and robots at the German automaker’s plant in Chattanooga voted 108-44 for UAW representation over two days ending Friday.

Volkswagen objected to the new vote favoring the UAW to represent just 162 skilled-trades workers, arguing that all of the plant’s 1,400 blue-collar workers should have a say over union issues. The German automaker said it plans to appeal the ruling allowing the vote to the full National Labor Relations Board.

“We believe that a union of only maintenance employees fractures our workforce and does not take into account the overwhelming community of interest shared between our maintenance and production employees,” the company said in a statement.

The vote comes nearly 20 months after the union was narrowly defeated in an election involving all hourly employees at the plant. The UAW has been thwarted for decades in attempts to represent workers outside of General Motors, Ford and Fiat Chrysler.