Photographer: Andrew Harrer/Bloomberg

VW Defends Communication With Peers Amid Cartel Probe

Updated on
  • Carmaker says it always works ‘very closely’ with authorities
  • Regulators investigating possible collusion with Daimler, BMW

Volkswagen AG defended the practice of talking with rivals about general technical developments, calling discussions with peers a commonplace way to foster innovation.

“This brings benefits in many respects, not least for customers, because innovative solutions become available more quickly and at a lower price than costlier individual solutions,” VW said Wednesday in an emailed statement following an extraordinary supervisory meeting.

The company declined to comment in detail on allegations of cartel activity other than to say that its policy is to work “very closely with the authorities in a spirit of cooperation and trust.”

Investigations by European regulators into whether VW colluded on technology for decades with German peers Daimler AG and BMW AG pose an additional financial risk for the automakers, which already face surging costs to comply with tightening emissions regulations across the globe. Shares fell industrywide after Der Spiegel reported on the cartel investigation last week, citing a document in which VW disclosed the possible breach to antitrust overseers, who eventually confirmed the probe.

Labor Response

The revelation irked many labor leaders, who fear the possible misconduct could jeopardize jobs, and triggered criticism from German politicians over a potential breach of competition rules.

Still, VW’s works council stood behind the company Wednesday, saying in an emailed statement that “the management board has dealt responsibly with the issue that’s on the table.”

What is the cartel case all about? A QuickTake Q&A explainer

The meetings that are under scrutiny were reviewed by internal auditors and legal experts, and VW informed the relevant competition authorities “about possible concerns regarding individual cases,” the works council said. Labor officials account for half of the company’s 20 supervisory board seats.

Porsche works council head Uwe Hueck was more vocal earlier this week, lashing out against top executives at sister brand Audi and suggesting management there be put on leave.

Communication Plea

Lower Saxony governor and VW supervisory board member Stephan Weil has said he learned about the cartel allegations through the news media, the same way he was informed of VW’s diesel scandal when it erupted in September 2015. Fallout from that issue, which involved manipulating vehicles to cheat on emissions tests, has cost the German company more than 22 billion euros ($25.6 billion) in penalties and repairs so far.

Weil in an emailed statement Wednesday urged the company’s management to pursue an “open communication with the public” as far as legal restrictions permit during the investigation and said the European Commission should clarify the situation as soon as it can.

VW is set to post second-quarter earnings on Thursday, when German Environment Minister Barbara Hendricks will meet separately with Chief Executive Officer Matthias Mueller and Bernd Osterloh, Volkswagen’s top labor representative, at company headquarters in Wolfsburg. The trip was arranged before the antitrust questions came to light. The country’s automakers face intensifying political pressure to reduce harmful emissions from diesel cars as parliamentary elections loom in two months.

    Before it's here, it's on the Bloomberg Terminal.