VW faces Allianz suit over share drop; jobs under threat after scandal

Tue Mar 8, 2016 1:03pm EST
 
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By Andreas Cremer

WOLFSBURG, Germany (Reuters) - German insurer Allianz (ALVG.DE: Quote) plans to sue Volkswagen (VOWG_p.DE: Quote) over the sharp drop in its shares as a result of the carmaker's diesel emissions scandal, a source familiar with the situation told Reuters.

If successful, the lawsuit would add to financial pressures on Volkswagen that its chief executive said on Tuesday would be "substantial and painful".

At the same time, the company's labour leader warned that the extent of possible job cuts at VW would depend "decisively" on the level of U.S. fines for its cheating of emissions tests.

"Should the future viability of Volkswagen be endangered by an unprecedented financial penalty, this will have dramatic social consequences," works council chairman Bernd Osterloh told more than 20,000 workers at company headquarters in Wolfsburg.

The 'Dieselgate' scandal has forced out the previous chief executive, tarnished one of Germany's most renowned corporate brands and driven down VW's share price by 31 percent since it emerged last September.

According to Thomson Reuters data, Allianz Global Investors holds 0.06 percent of VW preference shares and just 10,000 ordinary shares, so will have lost some 8.6 million euros ($9.5 million) on its stake.

The source said the Allianz lawsuit would happen "within this month." Allianz said in a statement it had not yet filed an actoin against VW but was weighing a suit.

The action will add to VW's litigation risks in Germany, where the carmaker already faces dozens of private lawsuits.   Continued...

 
The logo of German carmaker Volkswagen is seen on a Volkswagen Golf GTI car at a showroom of Swiss car importer AMAG in Duebendorf, Switzerland February 12, 2016.       Reuters/Arnd Wiegmann