FRANKFURT -- Gerhard Cromme, chairman of the German Corporate Governance Code Commission, will not seek a new term as supervisory board member at Volkswagen, a source familiar with the situation said on Wednesday.
"That's true," the source said, confirming a report by Germany's Manager magazine that the ongoing power struggle on VW's board had claimed a victim.
Cromme announced his intentions on Friday, Nov. 11, the source said, after VW Chairman Ferdinand Piech pushed through the appointment of Horst Neumann as new head of group personnel against the wishes of his own chief executive, Bernd Pischetsrieder.
Cromme's departure would open up a seat that could then be filled by a representative of Porsche, Volkswagen's now largest shareholder.
Porsche aims to secure board seats proportional to its 18.5 percent stake, which would mean at least two out of the 10 members that represent shareholders' interests.
In an advance copy of its Friday, Nov. 18, edition, the magazine reported, without citing sources, that Cromme had decided to quit the board.
Reuters reported over the weekend that the power struggle waged between Piech and his main board rival, conservative Lower Saxony state premier Christian Wulff, had escalated after Piech sided with employee representatives who comprise the other half of the 20-member board in backing their choice of Neumann.
For 16 years Neumann worked for the executive board of German engineering trade union IG Metall and is romantically linked with Andrea Nahles, leader of the Social Democrats' left wing.
Corporate governance observers have been critical of the appointment due to Neumann's close ties to the union with which he will have to negotiate over wages and working conditions.
Furthermore, Piech's support has been viewed as a quid-pro-quo after the worker representatives backed Piech unanimously against attempts by Wulff to dethrone him as chairman for alleged corporate governance reasons.
Wulff has attacked Piech's dual role as VW chairman as well as co-owner of both Porsche and Austrian car importer Porsche Holding, which has close business ties to VW.
Sources close to the employee representatives on the board have, however, questioned whether Wulff is politically motivated, since other board members such as Cromme are linked to companies that are key suppliers to VW.
Cromme is the supervisory board chairman of German steel and auto parts conglomerate ThyssenKrupp, while Heinrich von Pierer serves as chairman of Siemens, whose car parts unit Siemens VDO also conducts business with VW.
ThyssenKrupp and VW had no comment.