WOLFSBURG, Germany -- Volkswagen AG's controversial chairman, Ferdinand Piech, emerged largely unscathed from a supervisory board meeting on Monday, during which his loyalties were called into question.
A grandson of Ferdinand Porsche and co-owner of the legendary high-performance sports carmaker, Piech has come under scrutiny ever since his family's company, Porsche AG, recently bought an 18.5 percent stake in VW and demanded to take an active role on the board.
Following the meeting, VW said that the board had requested management to negotiate a basic agreement with Porsche, with the goal of a fair balance of interests while working together in the future.
German media had recently reported that a coup was imminent, to be led by Lower Saxony's conservative premier Christian Wulff, to replace Piech over a conflict of interest and enthrone VW and Siemens AG board member Heinrich von Pierer as chairman.
Piech told Germany's Der Spiegel over the weekend that he planned to stay on as chairman until 2007, when his term ends.
"The supervisory board did not vote (on Piech's role)," Juergen Peters, the body's deputy chairman, told reporters after the three-hour-long meeting ended.
Peters, head of the IG Metall union, reported, though, a heated exchange among the board's 20 members over Piech's dual role as VW chairman and co-owner of Porsche.
Nevertheless, Piech's position looked solid going into the meeting after the 10 members of VW's supervisory board representing its employees closed ranks behind him.
Since the chairman has two votes, Piech could secure the majority prior to a potential power struggle, an advantage Wulff did not challenge.
"I believe that there could be conflicts of interest arising from the shareholding of Porsche -- and the supervisory board chairman is an important investor there -- that need to be examined," Wulff told reporters prior to the start of the meeting, adding that he didn't expect a vote on staff issues.
The premier said he would present the board with an appraisal from JP Morgan over the legal implications of Porsche's investment.
Piech's position at Volkswagen had taken a dent, however, after one of the last management board members to have served under Piech when he was still VW chief executive was forced to resign under a cloud.
Ex-personnel chief Peter Hartz is now under investigation for possible misappropriation of company funds to win favor with worker leaders, such as those who sit on the board.
On Tuesday, the Brunswick city prosecutor's office said it expanded the investigation to include the works council chief at VW's Hanover plant, Guenter Lenz, who is also a VW board member.
Separately, Volkswagen said Chief Executive Bernd Pischetsrieder and his finance chief, Hans Dieter Poetsch, would hold a conference call on Tuesday, Oct. 11, about the company's cooperation with Porsche.
Porsche has secured an 18.5 percent stake in the German mass-market carmaker with the aim of ensuring stable ties with a key supplier through a "German solution" that would prevent a potential hostile takeover from short-term investors, described by German politicians as "locusts" this summer.
Analyst Christoph Dolleschal of Dresdner Kleinwort Wasserstein warned, though, that labor's support for Piech as chairman may have come at the expense of granting concessions that would guarantee German jobs.
"Investors believing the speed of restructuring at VW would accelerate under Porsche's control should not forget about the unions/workers' warm welcome for Porsche," he wrote in a research note to clients.
Dolleschal added that Porsche's targeted 300 million euros ($364.3 million) in annual synergies could only be generated by using VW's size to secure Porsche's future earnings: "In this case, VW shareholders are paying the price."
Juergen Kurz, a spokesman for German shareholder rights group DSW, said that while the conflict of interests was not optimal, it was neither new nor a reason to resign.
"What's critical is that he represents the interest of all shareholders and not just one and that, should a conflict of interests emerge, Piech would reveal this and act then in a neutral manner," he said.