Autos

Chris Bryant is a Bloomberg Gadfly columnist covering industrial companies. He previously worked for the Financial Times.

If activist investors and trade union bosses spent more time talking, rather than berating each other, capitalism would be the better for it. Take Volkswagen AG. Bloomberg News reported Friday that VW's chief labor representative Bernd Osterloh traveled to London to meet with institutional investors, some of them of the activist variety.

The influence of unions at VW is one reason shareholders, most of whom hold non-voting shares, often think their views aren't valued by the family/state-controlled carmaker. So this visit counts as a borderline revolutionary act -- and that's a thoroughly good thing.

Osterloh, whose spot on the VW supervisory board gives him a say in big strategic decisions, opposes job cuts and isn't a fan of asset sales. Workers blocked the sale of motorcycle maker Ducati, a trophy brand that contributes a tiny fraction of sales.

For their part, investors think VW's costs are too high. It has more than 600,000 employees and spends almost 14 billion euros ($16.6 billion) a year on R&D. Its sprawling portfolio of 12 brands suffers from a steep conglomerate discount and would be far more valuable if some units had separate listings.

Revving Up
VW shares are starting to pick up again after a long time in the post-dieselgate doldrums
Source: Bloomberg

Die-hard VW skeptics may characterize Osterloh as Marxist rabble-rouser, but the truth is more nuanced. He's not outright opposed to savings. A couple of years ago, Osterloh compiled a 400-page dossier of ways to save money at the low-margin VW brand. He knows that if VW doesn't make money, jobs are at risk. 

Similarly, institutional investors shouldn't be oblivious to VW having to consider a variety of stakeholders before making decisions. Pension funds look after trillions of dollars on behalf of workers. If industrial companies sacked their staff and replaced them with robots and AI, the asset managers wouldn’t have any savings to invest.

Bloomberg's report that Osterloh isn't against giving more independence to the trucks division, owner of the MAN and Scania brands, helped lift the shares 1.5 percent on Friday. That's equivalent to 1 billion euros in market capitalization. Not a bad start, as far as rapprochement gifts go. 

Of course, there are sensible reasons why labor's London roadshow shouldn't become a regular thing. Companies try to tell a consistent story to the investment community and Osterloh isn't exactly the type to stay on-message. But if meeting investors helps Osterloh warm to share-price boosting structural changes, this unlikely meeting of capital and labor will have been worth the risk.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Chris Bryant in Berlin at cbryant32@bloomberg.net

To contact the editor responsible for this story:
James Boxell at jboxell@bloomberg.net