Cayenne may return from Bratislava to Leipzig. Volkswagen’s deadlock is shaping its fate

Porsche SE, the holding company that controls the Volkswagen Group, on Friday reported a half-year net loss of 2.22 billion euros and on the same day publicly called on the group to stop delaying decisions on job cuts and plant closures. Hans Dieter Pötsch made the appeal, while also chairing Volkswagen’s supervisory board - the body in which a similarly tough management restructuring package failed to pass in July. The Bratislava-built Porsche Cayenne, a model that moved from Leipzig to Bratislava nine years ago and, according to German media, could return there, also fits into the same debate about capacity and German jobs.

A Vote We Hardly Wrote About Here

On 9 July, a vote took place in Volkswagen’s supervisory board in Wolfsburg that Slovak media barely registered, although it could also affect Bratislava. Blume’s restructuring package - tens of thousands of additional jobs on top of the already agreed voluntary departures and the closure of four German plants, including Audi’s plant in Neckarsulm - did not win support. Twelve of the nineteen members present voted against it, the entire employee bloc as well as representatives of Lower Saxony. Euronews ↗

So it was not the whole strategy that failed, but the package concerning jobs and plants - the parts that did not require supervisory board approval were presented publicly by the group. Meanwhile, the IG Metall trade union and works councils organised protests against the plan at several plants. SITA ↗

The power of Lower Saxony needs to be described precisely. The federal state holds 11.8 percent of the capital, but 20 percent of the voting rights, and the so-called Volkswagen Act gives it a blocking minority in key shareholder decisions. In the supervisory board, an instruction to build or move a plant also requires a two-thirds majority. Plant closures are not explicitly mentioned in the law, so legally this is a more complex issue than a simple veto. Euronext/Reuters ↗ Since then, Blume has said the discussions were constructive, only the complex decision has not yet been made, and he wants to close the package by the end of the year. Automobil Industrie ↗

Pressure Coming From Inside

On Friday, the owner - and at the same time the person who chairs the whole body - entered the dispute. Porsche SE reported a net loss of 2.22 billion euros for the first half of the year, compared with a profit of 338 million euros a year earlier; the decline was caused by non-cash write-downs on the value of holdings in Volkswagen and Porsche AG. TASR ↗

Pötsch said that the group stands at a historic turning point and that everyone involved must take responsibility for its competitiveness. "The longer decisions are dragged out, the bigger the problems will be," he said. The holding also called for the blockade in the supervisory board to end. Spiegel ↗ While Volkswagen’s net profit fell by almost a third in the first half of the year, Porsche AG increased its operating profit by roughly a third. Hospodářské noviny ↗

The Cayenne That Already Moved Once

For Bratislava, one important point is almost absent from the debate: if Cayenne moved to Leipzig, it would not be for the first time, but as a return. The model has been linked to Bratislava since 2002, but at first only body shells and part of the assembly were produced there; finished cars were completed in Leipzig. Only with the third generation in 2017 did Porsche move production fully to Bratislava. SITA ↗

The timing is all the more uncomfortable because Bratislava has just invested in the model. At the beginning of February this year, Porsche announced that production of the fully electric Cayenne had started here on the same flexible line as the combustion and hybrid versions, and during the summer shutdown construction began on a photovoltaic power plant in the site, with panels also installed on the roof of Porsche’s assembly hall. TASR ↗ According to German reports, all three powertrain versions should move to Leipzig, and the condition is that German employees accept lower wage costs for that to happen. Electrive ↗

Last year Volkswagen Slovakia produced almost 337,000 vehicles, employed 11,400 people, posted revenues of twelve billion euros and profit before tax of 330 million euros. TASR ↗ And here lies the paradox of the whole story: Christian Vollmer, a member of the Volkswagen brand board responsible for production, still included the Bratislava plant together with Győr in Hungary among the most competitive production centres in the entire group at the end of July, while the group also declares that it wants to produce where it is cheapest. Pravda ↗

Slovakia Is Silent, The President Talks About A Chinese Replacement

Since June, when KDH described the possible relocation as a "devastating signal" for the country’s competitiveness, the Slovak public reaction has practically stopped. TASR ↗ By the deadline, we were unable to find a public statement from the OZ KOVO trade union or the economy ministry reacting to the July vote in the supervisory board or to Friday’s Porsche SE results.

An indirect Slovak response came from a completely different place. At the end of July in Beijing, President Peter Pellegrini said that Slovakia was negotiating with a Chinese carmaker about an investment, did not name the company, and did not rule out that a Chinese manufacturer could replace one of the European carmakers currently producing in Slovakia. He did not speak about Cayenne or Volkswagen. Hospodárske noviny ↗

Limits Of This View

The whole Cayenne story still rests on German media reports, not on an official decision. Porsche has never confirmed the move; a spokesperson spoke only about efforts to increase competitiveness and make better use of capacity. The final word is due at Porsche’s October capital markets day.

The numbers also call for caution. Different sources give different figures for Blume’s plan - from tens of thousands of additional jobs to as many as 100,000 in total - depending on whether the already agreed voluntary departures are included. The details of the rejected package were not published, and no one has yet calculated how many jobs a Cayenne transfer would actually take from the Bratislava plant.

What we wrote in June still applies: production is decided by German internal corporate employment policy, not by the price of Slovak labour. The difference is that in June it was a plan, while today it is a power deadlock that the owner wants broken by the end of the year.

Read also: Porsche gave German plants certainty until 2035. It says nothing about Bratislava and the fate of Cayenne

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