Democracy in society, as codecision is often called, is complex. A good dozen interpreters will be needed this Friday in the conference hall on the Wolfsburg plant site to enable members of Volkswagen’s Global Works Council to communicate in 13 languages. For a special occasion, a guest who knows the autostadt on the Mittelland Canal reported. Gerhard Schröder, who enjoyed applauding and insulting during his tenure (1998 to 2005) as car chancellor, congratulates VW on his 75th birthday with co-decision. On November 27, 1945, the first employee representation was established. The beginning of a unique success story: Despite the great influence of employee representatives, VW has developed from a provincial manufacturer Beetle into a world market leader.
An affair with travel pleasure costs heads
Bernd Osterloh is the most powerful corporate council in Germany. He has seen several CEOs over the last 20 years; some did not survive long because of Osterloh. The VW Works Council is seen as a spokesperson for the workforce “which actively influences business decisions and manages its own innovative solutions”. The work of the works council as joint management. With different aspects.
Osterloh became chairman of the works council in 2005, when Klaus Volkert had to resign. He suggested the leadership on purpose because he probably considered himself inviolable. Due to luxury travel and prostitutes at company expense, a special type of VW participation has become interesting for a large part of the population. Looking back, the works council speaks of a “network of corruption and betrayal of the works council’s ideals.” Volkert was sentenced to two years and nine months in prison for breaching trust and favoring the works council. The fines were also received by HR Director Peter Hartz and Škoda Manager Helmuth Schuster.
In 2002, Gerhard Schroeder commissioned labor market reform proposals for Peter Hartz, then head of VW’s human resources department. Photo: DDP
The British wanted a democratic VW
The special position of VW employees’ representatives is explained by history. In the 1930s, the capital came to build a new plant from the German Labor Front, which was established after the Nazis divided the unions. After the war, the factory was originally operated under British control. The British decided against dismantling and operation in German state hands. The goal was a “democratically controlled industrial society” in which labor and capital should have equal rights. The management of the plant was transferred to the Land of Lower Saxony on condition that it jointly exercise ownership rights with the federal government.
“Avoiding Cooperative Conflicts”
The construction years in Wolfsburg were as difficult as anywhere else in the broken country. The watchdog of the British military government later remembered the first VW employee. “Many of them wore nothing but clothes, some still wore soldiers’ uniforms.” These people worked extremely hard in very poor conditions, barely anything to eat and without adequate accommodation. “But things looked up, the works council improved. “In washrooms, every worker with 8,300 employees can now shower once a week,” says the 1947 agreement.
Right of veto against closing a race
The first work contract, also since 1947, set out the rights that still apply today and that other works councils can only dream of: the VW Works Council can prevent the relocation or even closure of a plant. This right of veto continues in the VW Act and the Articles of Association of Volkswagen AG. The Works Council calls this a “cooperation-based conflict prevention” system. In 1950, the company council introduced company pension insurance and death insurance, in 1957 came a 40-hour week for shifts, in a regular shift it was 42.5 hours. VW now has 32,000 employees.
Merkel defends VW law
1960 GmbH becomes AG. 60 percent of the capital is given to small shareholders as people’s shares, with each federal government and the state of Lower Saxony holding 20 percent. The VW Act enters into force, with which the influence of politics is acknowledged in a joint-stock company. Many years later, when the European Commission wanted to repeal the law for regulatory reasons, the federal government prevented it: Angela Merkel was celebrated by 20,000 workers when she won in the autumn of 2008 in Best in Wolfsburg.
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The law promises.
The federal government has long since sold its shares, but the state governments of Lower Saxony do not even think about it: VW is the largest employer by far and Lower Saxony is – along with the Porsche and Piëch families – the largest shareholder to this day. If government officials and employees on the Supervisory Board agree, they may determine the business policy and composition of the Board of Directors. Today, it is clear again, as there is speculation about the future of CEO Herbert Diessa. Maybe he played with Osterloh too often.