Lower Saxony premier urges agreement on VW restructuring before board meeting

BERLIN, Aug 29 (Reuters) – One of the main players in a struggle to agree a restructuring plan for Volkswagen AG, Lower Saxony state Premier Olaf Lies, said there was heavy pressure on all sides to reach an agreement in the next few days.

The supervisory board of Europe’s largest automaker is due to meet on September 4 to discuss a turnaround plan potentially involving tens of thousands of additional job losses. The issue has pitted VW’s management against unions and the German state, its second-biggest shareholder.

“I strongly urge that we use the time remaining until the next meeting to bring the different positions together,” he told a briefing with journalists on Friday.

He said the business challenges facing Volkswagen, which has struggled in the face of costly tariffs, falling demand and mounting competition from China, needed to be handled urgently. But he said the group’s position in the wider industrial landscape also had to be considered.

“With its sites in Lower Saxony and across Germany, its tens of thousands of employees and their families, and its suppliers and service providers, Volkswagen also bears an enormous responsibility for the wider economy and society,” he said.

VW Chief Executive Oliver Blume wants to double planned job cuts to as many as 50,000, possibly close factories and spin off some company divisions in a radical drive to slash costs across the group.

That has triggered fierce opposition from unions and strong concern from Lower Saxony, which has an effective blocking minority shareholding.

The two sides are seeking a compromise likely to centre on the scale of job cuts and future plans for factories that are at risk, according to sources familiar with the discussions.

“I am convinced that we must find a viable solution here,” Lies said. He said VW had always combined economic prudence with social responsibility, “and the solution we are now seeking should be measured against that standard.”

VW’s executive committee, which includes VW’s works council chief, as well as Lies and members of the Porsche and Piech shareholder families, is set to convene on Thursday, a day ahead of the supervisory board meeting, to see where things stand.

(Reporting by Andreas Rinke; Writing by James Mackenzie; Editing by William Mallard)