GERMANY’S conservative opposition leader, Angela Merkel, is hoping to exploit a lurid sex and bribery scandal at Volkswagen to boost support for her plans to take on the trade unions if she wins a general election in September.
Her Christian Democrat Union (CDU) manifesto, to be unveiled tomorrow, will outline measures to weaken the powers of the unions. The party wants to change the law to allow companies that have secured the support of two-thirds of their workforce to bypass union negotiators and deal directly with their employees.
Merkel — known as Germany’s Iron Maiden — argues that the unions, which have a legal right to negotiate members’ pay, working hours and holiday entitlement, have become too strong and are damaging the economy.
The prospects for reform appear to have been boosted by the unfolding scandal at VW, a German economic giant with close ties to Gerhard Schröder, the chancellor, and his Social Democratic party.
Last week German newspapers were filled with extraordinary stories claiming that the company had bought the support of union officials — who have the right to participate in important decisions — by supplying call girls and exotic holidays also enjoyed by senior managers.
Particular attention has focused on a meeting of executives in Lisbon two years ago. According to an account by Bild, the country’s leading tabloid newspaper, escorts were ordered as the evening went on. One senior manager is said to have asked for a “young and lively dark-skinned girl” — subsequently identified by the newspaper as Joselia R, a 35-year-old Brazilian.
The executive was reported to have been so “inspired” by her performance that he later had her flown first-class to Paris, apparently at the company’s expense, when he attended a board meeting at the sumptuous Georges V hotel.
The allegations of bizarre goings-on at VW began to emerge when Helmuth Schuster, head of personnel at the company’s Czech division, was sacked last month after being accused of taking bribes from the company’s suppliers. He is now under investigation by German prosecutors.
Photographs of his former lover Katerina Brozova, a Czech actress and former cover girl for Playboy magazine, appeared in the German media with details of their relationship. Brozova, who has starred in several Czech films, is a regular target for gossip columnists fascinated by her colourful lifestyle.
Interest then switched to Klaus Volkert, a former welder who worked his way up the trade union hierarchy to become chairman of the workers’ council at Volkswagen.
He resigned late last month after admitting that he held shares in a Luxembourg firm believed to be part of a network of front companies that were allegedly set up by Schuster to secure VW contracts abroad.
Both men deny any wrongdoing.
Volkert’s humiliation has been compounded by revelations about his private life. According to German newspapers, VW paid for first-class flights across the Atlantic for Adriana Barros, another glamorous Brazilian, who is said to be on the company’s payroll.
When she was tracked down by German journalists she admitted to being flown around the world by the company but claimed to have been working as an advertising consultant.
The scandal is especially uncomfortable for the government because Peter Hartz, the company’s personnel chief who offered to resign on Friday, is a close associate of Schröder.
He drafted the chancellor’s unpopular labour market reforms, including cuts in benefits paid to the long-term unemployed, and remains so closely identified with them that they bear his name.
Hartz has denied allegations that he presided over a slush fund running to seven figures, which union leaders were free to dip into.
In tendering his resignation, however, Hartz said he wanted to prevent further damage to his employers. “This is about more than just me,” he said. “This is about the reputation of Volkswagen for which I feel especially responsible.”
Hartz’s torment may not yet be over. Yesterday, in a further twist in the scandal, Bild claimed that Joselia R had identified her mystery client — whom she had known as “Peter” — as none other than the personnel chief himself.
“Oh, that is my Peter,” she said, picking his photograph out of a dozen given to her by the newspaper.
“Peter was always so secretive. Whenever I wanted to know more about him, he always said only, ‘I am a private man’.” Neither Hartz nor Volkswagen commented on the allegation.
Such claims will only add to the damage for Schröder, whose party is languishing on 27% in the polls, compared with 44% for Merkel’s CDU and the Christian Social Union, its Bavarian sister party.
Commentators believe it is all but impossible for Schröder to make up the gap by September.
VW has long been held up by the Social Democrats as a model of German social consensus. Its board is divided equally between workers’ representatives and executives. Schröder sat on it when he was state premier of Lower Saxony, where the company has its headquarters at Wolfsburg.
The Christian Democrats insist that the scandal demonstrates that the system is open to abuse.
“It’s time the role of our unions was reassessed,” said Ralf Brauksiepe, an MP and party spokesman. “The particular blend of politics and unionism that has contributed to problems at Volkswagen has to be tackled head on.”
