Thursday, April 20, 2006

Volkswagen Board to Discuss Pischetsrieder New Contract

Text from Bloomberg.com
April 20 (Bloomberg) -- Volkswagen AG's supervisory board will discuss renewing Chief Executive Officer Bernd Pischetsrieder's contract at its next meeting, after delaying a decision on the matter at its two-day meeting ending today.

``We focused on strategic issue at this meeting,'' Pischetsrieder said at a press conference today at the carmaker's headquarters in Wolfsburg, Germany.

Supervisory Board Chairman Ferdinand Piech in a Wall Street Journal interview March 1 set off a public debate over Pischetsrieder's contract renewal by saying the matter was an ``open issue'' as union representatives seemed to be against it. Pischetsrieder said the next day he would likely lose his job if labor representatives, who have half the supervisory board seats, didn't support him.

Pischetsrieder, 58, has been at odds with unions over efforts to cut labor and production costs. He threatened on Feb. 10 to eliminate as many as 20,000 jobs, or 20 percent of the company's western German workforce, as part of a plan to more than quadruple pretax profit to 5.1 billion euros ($6.3 billion) by 2008. Volkswagen is also looking closing parts of German plants, which lost ``hundreds of millions of euros'' last year.

The current five-year contract expires next April. It's common for German companies to decide on extensions well in advance.

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