The ambience is functional, nothing more and nothing less. For Monday and Tuesday, the negotiators from IG Metall and Volkswagen have booked themselves into the Hotel Wyndham Hannover Atrium, a well-kept but aging four-star facility in the northeast of Lower Saxony’s state capital. Outside, traffic rushes past on the Messeschnellweg in the direction of the Buchholz motorway junction. Inside, rooms are reserved for managers, trade unionists and their entourage, around 80 people in all, according to negotiating circles. As one participant puts it, we are now faced with a “mammoth task.” After a long public uproar, a marathon of negotiations over two days will show whether a solution to the dispute over wage cuts, factory closures and mass layoffs is possible. VW has been introducing new, drastic savings plans since September -Group became known, the conflict is keeping the republic in suspense. Recently there was talk of “constructive” discussions, but what exactly that meant remained unclear. In terms of content, the positions are still far apart. Germany’s largest car company wants to reduce its costs in order to react to the crisis, which is also increasingly affecting other industry giants such as Mercedes and the suppliers Continental, Bosch and ZF. IG Metall wants to preserve locations and prevent redundancies. No new warning strikes had been announced as of Sunday after tens of thousands of employees stopped work during the latest round of negotiations last week. But the union is keeping the pressure high. “Either the company will set the right course shortly before Christmas or we will face a massive escalation in 2025,” says IG Metall negotiator Thorsten Gröger. What’s next in Zwickau? Essentially, it’s about a new in-house tariff for 120,000 Employees at several locations in Lower Saxony and a components factory in Baunatal, Hesse. The discussions also touch on advance planning for the next few years, including the allocation of certain models to the factories, a topic that poses the risk of friction within the workforce. Fears are growing among East German VW employees that they will be left behind in the struggle to reduce production Positions and the occupancy of the plants are disadvantaged. In Zwickau, 1,000 temporary employees have to leave. The workforce fears that they will lose models like the compact ID.3 electric car and that in the end only an Audi vehicle will be left. That would result in a lot of staff surplus. Recently there was also talk of partially relocating Golf production from Wolfsburg to Mexico. The e-Bulli “ID Buzz” could be relocated from Hanover to Poland. All of this has so far been just speculation, it has been said in unison over the past few days by those involved on both the company and employee sides. In the middle of the election campaign, the SPD in particular is acting as a representative of employee interests. Labor Minister Hubertus Heil, who had recently railed against the closure of all locations at the VW headquarters, followed up at the weekend and explicitly placed the planned extension of short-time work benefits from twelve to 24 months in the context of the VW crisis. “Our task as a state is to accompany this solution with an active economic and industrial policy,” he told the newspaper “Augsburger Allgemeine”. Porsche SE is writing off billionsThe investment company of the Porsche and Piëch shareholder families, Porsche SE, based in Stuttgart, has announced that it wanted to write off billions of euros on its stake in the VW Group and the sports car manufacturer Porsche. According to information from Porsche Automobil Holding on Friday evening after the stock market closed, VW management announced at short notice on Friday that “adoption of the current planning rounds” was no longer expected until the end of the year. This is a further signal of how much the conflict is causing uncertainty. Specifically, the investment company Porsche SE wants to reduce the balance sheet value of its shares in VW in a range between seven and 20 billion euros. The value of the stake in the sports car manufacturer Porsche will also probably be adjusted by one to two billion euros. The investment company, which is listed in the Dax stock index, is therefore withdrawing its earnings forecast for the current financial year of 2.4 to 4.4 billion euros and is now expecting a significant loss after taxes. Through Porsche SE, the billionaire families Porsche and Piëch control their majority stake in VW and above In addition, a good quarter of the voting rights in its listed subsidiary, the sports car manufacturer Porsche AG, whose origins go back to the family patriarch, the automobile engineer who died in 1951 Ferdinand Porsche. The decisive factor for the write-downs now announced is that Porsche SE records the shares in its books at a higher value than they are worth based on the current price. This also has to do with a technical effect that affects accounting according to the international standard “IFRS”. As a result, the theoretical value of the papers on the balance sheet is around 300 euros each, although the voting VW ordinary shares on the stock exchange only cost around 90 euros after a long decline in price. More on the topic Porsche SE emphasizes that only the book values and the company change can continue to distribute money to shareholders. “We plan to pay a dividend, and we can also pay a dividend, because the expected accounting loss is not cash-effective,” said Johannes Lattwein, the CFO of Porsche SE, to the F.A.Z. “These impairments do not limit our ability to pay dividends.” Porsche SE now wants to base its forward planning on “analyst expectations” instead of internal data because, unlike usual, VW will no longer complete its five-year planning on time this year.
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