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VW may move production because of Russia's cutoff of natural gas

Volkswagen AG is exploring ways to counter a shortage in natural gas, including shifting production around its network of global facilities, signaling how the energy crisis unleashed by Russia’s invasion of Ukraine threatens to upend EuropeÂ’s industrial landscape. Volkswagen, EuropeÂ’s biggest carmaker, said Thursday that reallocating some of its production was one of the options available in the medium term if gas shortages last much beyond this winter. The company has major factories in Germany, the Czech Republic and Slovakia, which are among European countries most reliant on Russian gas, as well as facilities in southern Europe that source energy from elsewhere. “As mid-term alternatives, we are focusing on greater localization, relocation of manufacturing capacity, or technical alternatives, similar to what is already common practice in the context of challenges related to semiconductor shortages and other recent supply chain disruptions,” Geng Wu, VolkswagenÂ’s head of purchasing, said in a statement.  RussiaÂ’s decision to throttle gas supplies to Europe has raised concerns that Germany might be forced to ration its fuel. Recent news that gas storage levels hit 90% ahead of schedule has soothed fears of acute shortages this winter, but Germany faces a challenge in replenishing depleted reserves next summer without contributions from Russia. Southwestern Europe or coastal zones of northern Europe, both of which have better access to seaborne liquefied natural gas cargoes, could be the beneficiaries of any production shift, a Volkswagen spokesman said by phone. The Volkswagen group already operates car factories in Portugal, Spain and Belgium, countries that host LNG terminals. Labor hurdles To be sure, any major production shift away from EuropeÂ’s biggest economy would face significant hurdles. VW has some 295,000 employees in Germany and worker representatives account for around half the companyÂ’s 20-member supervisory board. Any shift in production would likely involve a limited number of vehicles rather than wholesale factory shutdowns. While gas supplies for VWÂ’s plants are currently secured, the company has identified potential savings at its European sites to cut gas consumption by a “mid-double-digit percentage,” said Michael Heinemann, managing director of VWÂ’s power-plant unit. Still, the carmaker said it was concerned about the effect high gas prices could have on its suppliers.

German judge 'inclined to dismiss' hedge fund lawsuit against Porsche

Last year, around two dozen investors, including hedge funds, leveled a 1.4 billion euro ($1.95 billion at the time) lawsuit against Porsche in connection with the automaker's attempted takeover of Volkswagen in 2008. The Stuttgart Regional Court dismissed the case. Around 19 of those plaintiffs are heading back to court to appeal the ruling and still hope to get 1.2 billion euros ($1.4 billion). However, according to one German judge, the chances for success aren't any better this time around. "On balance it's our view that we consider the lawsuit, or the appeal, to be unpromising for several reasons," Gerhard Ruf, a judge in Stuttgart, said to Reuters. "We are inclined to dismiss the case." The court's ruling on the appeal will be announced on March 26. The investors' case hinges on Porsche's strategy surrounding the botched takeover. The sports car maker said that it wasn't trying to control VW, when in fact it was. These hedge funds had bet against Volkswagen stock, but the share price surged when Porsche's plan inevitably came to light. Investors have sued the sports car company multiple times since then in attempts to recoup billions of dollars. However, none of the lawsuits have been successful, whether attempted in the US or Germany. Former Porsche CEO Wendelin Wiedeking and and CFO Holger Haerter might still stand trial for the alleged stock manipulation, though. News Source: ReutersImage Credit: Matthias Rietschel / AP Photo Government/Legal Porsche Volkswagen lawsuit hedge funds porsche lawsuit

The Volkswagen Group switches official language to English

The Volkswagen Group can't be fairly thought of as entirely German anymore, so the news that the company is switching its official language to English to help attract managers and executives is a rational, if surprising, decision. While many VW Group companies are still staidly German in character and culture, consider the other companies that it controls: Bentley (British), Bugatti (French), Ducati and Lamborghini (Italian), Skoda (Czech), Scania trucks (Swedish), and SEAT (Spanish). Not to mention the large Volkswagen Group of America operation, which constructs cars in Chattanooga, TN. Volkswagen's explicit motivation is to improve management recruitment – making sure the company isn't losing out on candidates for important positions because they can't speak German – and that's inherently sensible in a globalized economy. Particularly considering, like it or lump it, that English is the lingua franca of said global economy. It also should make it inherently easier to communicate between its world-wide subsidiaries and coordinate operations. It's hard to say for sure if this will have any impact on the consumer, although it's easy to see the benefits if, say, VW Group hires some American product planners or engineers and they push for features and designs that more closely suit American needs. After all, the US is a hugely important market for any manufacturer, and so the switch to English almost certainly has something to do with the outsized influence of the US in the global economy. And there doesn't seem to be a downside from a purely rational perspective, although it could mean that the Group's corporate culture becomes less German. Whether that's a good or a bad thing depends on your perspective. Related Video: Image Credit: Krisztian Bocsi/Bloomberg via Getty Images Plants/Manufacturing Audi Bentley Bugatti Porsche Volkswagen SEAT Skoda