EU to sue over VW golden share
A five-year battle between the European Commission and Germany came to a head in October as the commissioner for internal markets launched a lawsuit against the German government for flouting EU competition rules. The state has refused to offload its "golden share" in Volkswagen, Europe's biggest car maker, which prevents a hostile foreign takeover.
The case could not have come at a worst time for the company and the government as a wave of strikes in the automotive sector sweeps the country. The week before, VW management had met the leaders of the IG Metall union as 4,000 workers rallied outside the factory.
VW is under growing pressure from leaner competitors, which have begun a price war in North America. Cheaper Japanese cars have taken domestic market share.
Management wants to freeze the wages of it 103,000 staff for two years before slashing them by a third over the next seven years. VW finance chief Hans Dieter Poetsch has threatened to cut more than 30,000 jobs if unions don't agree to management's plans to reduce labour costs by e2 billion by 2011. The unions concede some changes are necessary but are holding out for a 4% annual pay rise and 10-year job guarantees.