GENEVA (Reuters) - Volkswagen’s (VOWG_p.DE) powerful works council will only back a stock sale of the group’s truck and bus division if it doesn’t restrict workers’ rights, it said on Tuesday.
Europe’s largest carmaker is weighing a listing of its business that combines the MAN (MANG.DE) and Scania heavy-truck brands as part of a broader structural overhaul to boost efficiency, its chief executive said on Monday.
An initial public offering (IPO) of Volkswagen Truck & Bus GmbH is “a possible option,” the works council said.
At present, however, the council neither backs an IPO, nor turning the division’s legal structure into a German stock corporation (AG), it added.
“Both will only happen if the works councils of MAN, Scania and VW support this,” the council said. “In case of doubt this will take time and clear commitments (showing) that this is positive for workforces.”
In the wake of VW’s 2015 “dieselgate” emissions scandal, investors have urged management to streamline its portfolio of assets and pursue structural change to become a more attractive business.
While VW’s biggest-ever corporate scandal has led to some change, major restructuring has been constrained by the works council, whose members control half the seats on the carmaker’s supervisory board. The council blocked, for example, a sale of luxury division Audi’s (NSUG.DE) motorcycle brand Ducati.
“Even though a partial IPO limits the attractiveness to investors, it signals management’s strategic focus and the company’s ability to shape the business,” Evercore ISI analyst Arndt Ellinghorst said in a Feb. 8 note. He has an “outperform” rating on the stock.
Reporting by Jan Schwartz and Andreas Cremer; Editing by Mark Potter