The dynasty that controls Volkswagen has vowed to protect jobs, as the company reportedly took a €20bn (£14bn) loan to help it survive the diesel emissions scandal.
Fallout from the affair widened on Wednesday, as fresh data in Germany showed a dip in sales and police raided the Italian offices of VW’s parent company, Porsche.
But the patriarch of the Porsche family, which controls VW with more than 50% of shareholder votes, said workers would not be sacrificed to save the company. “Jobs are a very valuable asset,” said Wolfgang Porsche, chairman of Porsche Automobil Holding, speaking to staff at VW’s headquarters in Wolfsburg, Germany. “This asset mustn’t be squandered.”
VW’s links to the Porsche family extend to 1937, when Ferdinand Porsche’s engineering firm designed the VW Beetle for Adolf Hitler’s Nazi party.
The statement of support from Porsche came as VW reportedly secured a €20bn bridging loan to shore up its balance sheet against the prospect of multibillion-pound fines. Securing new financing could prove a key step in the company’s attempt to limit the financial and reputational damage it sustains.
VW’s credit rating was cut earlier this week by Standard & Poor’s, following similar moves by rivals Fitch and Moody’s. But bank participation in a bridging loan would signal that multiple lenders believe the company will recover. Thirteen banks have each reportedly offered loans of up to €2.5bn, with the total offered reaching nearly €30bn, Reuters reported.
VW is expected to choose which lending facilities it wants to take in the next few days.
The need for a loan was highlighted by a dip in car sales in its native Germany, against a rising market. While VW remains the most popular marque in Germany, new registrations dropped by 2% in November, compared with the 8.9% rise enjoyed by the overall car industry. VW sales in the US slumped by 25% in November according to auto industry figures revealed this week, although this is a relatively small market for the German company.
The sales dip follows revelations that VW fitted diesel cars with a device designed to cheat tests that show how much CO2 their vehicles emit.
Police raided the Italian headquarters of Porsche in Padua, as prosecutors in multiple countries continued to gather evidence. Italian prosecutors have begun an investigation into eight managers at Porsche for alleged fraud connected to the emissions scandal.
“It’s an investigation like the one conducted at Volkswagen Italia and Lamborghini, which all fall under the procedures linked to the ‘dieselgate’ affair,” said a spokesman. “It’s all very clear and transparent, there is nothing shocking.”
Shares in the auto giant fell by 1.7% on the Deutsche Börse by mid-afternoon on Wednesday, having slumped by nearly 30% since its chastening admission that it cheated emissions tests.
VW has set aside €6.7bn to cover the cost of the scandal and has also said it expects a €2bn hit from falsifying CO2 emissions certification.
The cost could be even higher, as more details of the scandal’s impact begin to filter through and customers consider seeking compensation. The firm is also set to recall some 323,700 cars in India, it emerged, adding to expectations that it would recall and re-equip about 8.5m cars in Europe.
