Volkswagen Group is considering the sale of some of its assets and brands as part of a refocusing of the group’s core focus, according to recent reports. Presumably, such an asset sale would also help the group raise the funds necessary for the paying of all applicable fines as well, without placing heavy burdens on the group’s remaining brands.
The move is of course a response to the ongoing diesel emissions cheating scandal — where Volkswagen Group was found to be actively working to defraud emissions regulators and buyers. The group now faces up to $10 billion (or more) in fines from regulators in the US. Fines are likely in other regions as well. Sales have fallen notably in many regions and markets since the scandal became public.
Gas 2 provides more:
Today, Volkswagen Group is comprised of twelve brands, including heavy truck company Scania. It also builds engines for ships under the MAN brand and has a welter of small component manufacturing division. On June 15, CEO Matthias Mueller told the Volkswagen board of directors that the company is reviewing all of its far flung operations. It will abandon its empire building strategy in favor of a new commitment to electric and autonomous vehicles and car sharing services. Along the way, all those separate component divisions will be combined into one and some of those brands may be sold so the company can focus on its core business.
…Getting rid of assets may not sit well with unions and the German state of Lower Saxony. The latter is where much of Volkswagen’s production takes place. It is also a major stockholder in the company. Both are opposed to the company decreasing in size.
Meanwhile, there are reports that board members representing the Porsche and Piech families are planning to vote against paying a dividend to stockholders this year. The two families together own 52% of Volkswagen stock. The next board meeting is scheduled for June 22. The vote is fraught with serious implications. Under German law, if a company fails to pay a dividend for two consecutive years, its preferred stock holders are automatically granted voting rights. That could reduce the number of votes the Porsche and Piech families have below the 50% figure needed to give them control of the company. It would also dilute the influence of the state of Lower Saxony.
That would certainly be an interesting situation, wouldn’t it? Either way that the vote goes, big changes are no doubt coming….
Matthias Mueller, quoted in the Cleantech Revolution Tour video below, was formerly the head of Porsche, and had some interesting things to say about Tesla in that role.
Video is from the 1st Cleantech Revolution Tour conference. The next one is to be held in Leipzig, Germany, on Tuesday, June 21.