Lower Saxony’s new government to keep Volkswagen stake

Lower Saxony, Volkswagen’s second-largest shareholder, stated it will hold on to its stake in the automaker regardless of one of the German state’s two major parties calling for modifications in the way the company is handled.

The northwestern German state, which draws numerous millions of euros in dividend payments and business tax from Volkswagen, owns an 11.8 percent stake in the company and controls 20 percent of the voting rights.

“We clearly acknowledge our commitment to the state holding in Volkswagen which we stick to,” Lower Saxony’s prime minister Stephan Weil stated.

“This state holding is of the highest value for the economic development of Lower Saxony,” he added.

Lower Saxony is home to automaker’s international headquarters and about 120,000 staff used by the automaker.

Weil’s Social Democrats (SPD) recently created a grand coalition government with the Christian Democrats (CDU) that will operate Lower Saxony for the next five years after the previous SPD-Greens alliance lost its majority in a vote on October 15.

A potential disposal of Lower Saxony’s VW stake has actually been promoted by Germany’s liberal pro-business Free Democrats which last Sunday set off a political crisis in Europe’s most populated country by taking out of exploratory union talks with Chancellor Angela Merkel’s CDU and the Green Party.

Bernd Althusmann, Lower Saxony’s inbound economy minister, has preferred somebody from outside the auto industry to succeed Volkswagen CEO Matthias Mueller and wanted to cede among the state’s two board seats to a non-political specialist.

However after Althusmann’s CDU party lost the local election last month to the SPD, he has claimed the economy minister’s right to join VW’s supervisory board together with Weil.