The head of Volkswagen's controlling family broke his silence more than two months after the emissions-cheating scandal erupted, throwing his support behind Chief Executive Officer Matthias Mueller and vowing to protect jobs.
Wolfgang Porsche, head of the family that owns a majority stake in the carmaker, delivered a message of calm to a company rocked by a series of revelations over manipulated vehicles. Addressing about 20,000 employees at Volkswagen's main factory in Wolfsburg, Germany, he underscored the family's commitment to the company and said the investigation is the top priority.
"I am of the rock-solid conviction that Volkswagen can weather the situation and emerge even stronger from the crisis," said Wolfgang Porsche, the grandson of the creator of the Volkswagen Beetle. "No one here is giving into panic." He was flanked by other supervisory board members who represent the reclusive clan, Louise Kiesling and Hans-Michel Piech, as well as German Economy Minister Sigmar Gabriel.
Speaking to an audience that overflowed the factory's massive Hall 11, with several hundred employees following the meeting on screens set up outside, Wolfgang Porsche said the clan supports job security at Volkswagen and thanked the efforts made by Mueller and other managers - naming VW Brand chief Herbert Diess specifically. Still, the cousin of former Chairman Ferdinand Piech didn't make light of the challenges facing the carmaker.
The gathering comes amid mixed news for Volkswagen. Though the company has made progress toward a simpler-than-expected recall of 8.5 million rigged diesel cars in Europe, talks with regulators are still ongoing in the United States, where hefty fines and more difficult recalls loom. Meanwhile, sales plunged in the U.S., and market share fell in Germany. The ultimate financial impact, which the company has said will total more than 8.7 billion euros ($9.24 billion), is also uncertain.
To show it has enough liquidity to weather the crisis, the carmaker plans to sign a 20 billion-euro bridge loan on Friday, people familiar with the matter said. The banks, led by Citigroup and UniCredit, will each provide financing of either 1.5 billion euros or 2.5 billion euros, the people said.
"The owner families have been very discreet so far amid this unprecedented crisis for the company," said Yasmina Serghini, a Paris-based analyst for Moody's. The family's stance is "an important indicator for the company's plan to accelerate reforms and improve cost efficiency."
The family votes in a bloc, making consensus building crucial among its 30 to 40 members. They control 52 percent of Volkswagen's voting stock through Stuttgart-based Porsche Holding. The clan tends to keep a low profile, and most live around the border of Germany and Austria.
The carmaker is putting production in Wolfsburg on hold for two weeks over Christmas to avoid bloated inventories. The factory is VW's largest and one of the biggest car-manufacturing locations in the world. It produced about 840,000 vehicles last year, but sustaining output could be a struggle if demand continues to slide.
© 2015 Bloomberg L.P.
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