The deadline to accept the Volkswagen offer is not until April 25, but today's action with Swedish unions safeguarding employee jobs did bring the deal one step closer to becoming a reality.
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An agreement has been reached and signed by Volkswagen Aktiengesellschaft, the Swedish trade unions at Scania and Volkswagen’s Global Works Council that will secure employment at Scania’s locations. The agreement will become effective upon the completion of Volkswagen’s offer for Scania. On February 21, Volkswagen announced a public offer to the shareholders of Scania to tender all shares in Scania to Volkswagen at a price of SEK 200 ($31) in cash per share. The acceptance period of the offer ends on April 25, 2014.
The agreement essentially stipulates the following:
- Production cannot be relocated without the approval of the employee representatives.
- Scania’s head office is and will remain in Södertälje.
- Research and development will be retained there in full.
- Scania’s employee representatives will be involved in all significant decisions by the Volkswagen Group that affect the company’s commercial vehicles strategy.
Prof. Dr. Martin Winterkorn, CEO of Volkswagen, stressed that the company is and has always supported the Scania employees, and that they have no cause for concern. In fact, the completion of the offer will be a positive move for both the company and its employees:
“There has never been any doubt that we are one hundred percent behind Scania’s employees, locations and development centers as well as the company’s head office in Södertälje. For Scania as a company and for its employees, the planned transaction represents an attractive, long-term prospect with additional business opportunities. This will allow Scania to continue its success as an independent brand with unique vehicles and services, as well as leading technologies.”
Bernd Osterloh, the chairman of Volkswagen’s Group Works Council, echoed Winterkorn, stressing the positive move that this will be for employees of Scania, the company itself, and for Volkswagen:
“Together with our colleagues at Scania, we were able to reach an agreement ensuring that Scania’s employees benefit from maximum security. Together, we have extended the opportunities for codetermination for Scania’s trade unions, in line with the Volkswagen Group’s tradition. As Volkswagen’s Works Council, it is important to us that our colleagues at Scania can be sure that their company can look towards a bright future. This is assured by the agreement. It also guarantees that Scania will remain Scania. We are looking forward to being able to intensify our more than ten years of close cooperation with our colleagues at Scania.”
Volkswagen has assured the employee representatives of Scania, MAN and Volkswagen that it will provide codetermination for the employees regarding Volkswagen’s Integrated Commercial Vehicles group. This will ensure that employees can be involved in determining the overall strategy for the Commercial Vehicles business area in the Volkswagen Group and that key decisions on investments and locations will not be made without the influence of employees.
In a previous statement, Volkswagen was firm in its belief that this would be a strong forward step for all parties, and was confident in the completion of the offer by April 25:
“We trust that investors will appreciate this unique opportunity. We remain, regardless of the committee’s statement, confident that the offer will be successful and will not complete it unless the offer is accepted to such extent that Volkswagen becomes the owner of more than 90 percent of all shares in Scania.”
The committee’s statement referred to was that of the Independent Committee of the Scania Board of Directors, in which they concluded:
“Based on the long-term prospects of Scania, its growth outlook, technological excellence and the synergy potential, the Committee believes the Offer does not reflect the long-term fundamental value of Scania and a fair share of the expected synergy potential and recommends to Scania’s shareholders not to tender their shares.”
Today’s agreement appears to be a step forward in the direction of the completion of the offer.
Image: Flickr CC
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