Aug 17, 2009
The following was written by a correspondent in German and published in Lutte Ouvrière (Workers Struggle), the paper of the revolutionary workers group of that name active in France.
Porsche (sales of 99,000 cars a year) and Volkswagen (sales of 6.3 million cars a year) officially announced their intent to merge on July 23. Porsche, one sixteenth the size of VW, had earlier announced it wanted to buy Volkswagen.
In 2006, stock investors pushed up the price of VW shares from $42 a share to $112, after Volkswagen announced its plan to get rid of 20,000 jobs. In 2007, when Porsche announced its intent to buy VW, the stock hit $280. One day in October 2008, VW stock climbed to the fantastic price of $1,400 a share!
And that’s why Porsche showed a profit higher than all its sales in 2007-08 – because it owned a lot of VW stock!
By 2008, Porsche had gobbled up 50% of VW’s shares. Its CEO announced that he was ready to close several VW factories, which he said “should have been closed a long time ago.... I know how to make money with cars.”
Then came the crisis. Car sales dropped. The price of auto companies’ stocks dropped as well. Porsche found itself deep in debt, with banks shutting off credit. Porsche rapidly had to find between 12 and 20 billion dollars to pay off its debts. Porsche could no longer buy all of VW – it had to settle for a merger.
But don’t cry for Porsche! VW will pay 11 billion dollars to Porsche for the “privilege” of merging!
Thus the Porsche-Piëch family plans to solve its problems on the back of the workers – Porsche and VW workers – trying not to lose a penny of its immense fortune. VW’s reserves, like all the dividends of VW and Porsche that the Porsche-Piëch family has pocketed since the beginning of the year, are the fruit of the exploitation of the workers, an exploitation that has increased a lot in recent years. If Volkswagen continues to make profit for the Porsche family despite the crisis, it’s not only thanks to the European “Cash for Clunkers.” It’s thanks, above all, to management’s elimination of 35,000 or so workers, increasing the work week by four hours a week and imposing much lower wages on new hires.
And finally, part of the money that VW used to pay its stockholders – including the Porsche family – comes from the funds that are supposed to pay for the pensions of its German workers.