April 29, 2016 / 6:01 PM / a year ago

VW executive committee balks at Qatar's push for seat: sources

A giant logo of Volkswagen is pictured on the wall of its production facility in Wolfsburg, Germany, April 28, 2016. REUTERS/Fabrizio Bensch

FRANKFURT/BERLIN (Reuters) - Frustrated with the pace of reform at Volkswagen, shareholder Qatar has asked the carmaker for a seat on the company’s executive committee, a request that has met with substantial opposition, two sources familiar with the matter said on Friday.

Qatar, the company’s third-largest shareholder with a 17 percent stake, wants to join the committee, which currently has six members including the company’s chairman, the head of VW’s works council, the state premier of Lower Saxony and the chief of trade union IG Metall.

Creating a new seat for Qatar - which has two seats on the broader 20-member supervisory board including Qatar Airways chief executive Akbar Al Baker - would entail also creating an eighth position for a labor representative, to keep a required balance between worker and shareholder representatives.

“There are certain reservations among the executive committee members that admitting two new representatives would weaken the ability of the committee to take decisions,” one of the people said, adding that the majority of the current members were opposed to such a move.

The issue is still being discussed by the supervisory board and no decisions have yet been taken, the people said.

Qatar has been a largely passive investor in Europe’s largest carmaker but has recently grown impatient with the pace of reform amid opposition from labor representatives, the sources said.

Volkswagen managers have been working on new plans to revive the company’s performance, but labor representatives, who control 9 seats on the 20-strong supervisory board, have voiced their opposition.

In November, VW’s works council chief Bernd Osterloh, who leads the labor representatives, criticized VW brand chief Herbert Diess, accusing him of cutting costs without consulting workers.

But Osterloh, who can normally rely on the support of two board members from VW’s home region of Lower Saxony, was forced to back down after a representative from Qatar said his view was not shared by the majority.

The Qatari intervention was unusual because its two board members rarely speak at the meetings, the sources said.

Earlier this month, Osterloh renewed his attack on Diess, accusing him of betraying workers and trying to use the company’s Volkswagen diesel emissions scandal as a pretext for pushing through job cuts.

Volkswagen has also asked Qatar to nominate a woman for the supervisory board, the people said, as it is obliged to fill board vacancies with female candidates until it reaches a 30 percent quota, they said.

Before it can formalize the board membership of new Chairman Hans Dieter Poetsch at its annual shareholder meeting in June, VW needs to elect a woman to the supervisory board, they said.

Volkswagen, the company’s works council, Qatar and Lower Saxony declined to comment.

Additional reporting by Tom Finn in Doha; Editing by Georgina Prodhan and Jane Merriman

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