VW Grapples With Unwanted Connection to German Far-Right

(Bloomberg) -- Volkswagen AG is grappling with an unwanted connection to Germany’s far-right AfD party, which is holding its national convention at a hall that bears the carmaker’s name this weekend.

VW has called on its workers to “resist the lure of populism,” and legal affairs chief Hiltrud Werner described the AfD’s growing support as an “increasing problem” in eastern Germany, where it recorded strong gains in state elections this fall.

The auto giant has urged the arena’s operator to cover its logo during the anti-immigrant group’s meeting at the Volkswagen Halle in Braunschweig.

But key figures, including senior executives, are now discussing if the effort is in keeping with the code of conduct adopted in the wake of the diesel-emissions scandal to encourage more open discussions, according to people familiar with the matter.

Some officials argue that freedom of speech must be protected, and the AfD’s controversial positions can’t just be ignored, said the people, who asked not to be identified as the talks aren’t public. VW declined to comment.

Nazi Past

The internal controversy highlights a broader challenge for multinational corporations over how to deal with populists. The groups often push for protectionist policies and take rigid approaches on migration, while large manufacturers rely on global trade and diverse workforces. Volkswagen employs 650,000 people in 122 factories across the globe.

Because of a corporate history rooted in its founding in 1937 by the Nazis to develop a “Volkswagen” (or people’s car), the company is particularly exposed. The following year, Adolf Hitler held a speech in front of a crowd of more than 50,000 people during a ceremony to mark the start of construction of VW’s main factory and the adjacent town that was renamed Wolfsburg after World War II.

VW, which is partly owned by the state of Lower Saxony, has made considerable efforts to document its history, which included using forced labor. The dark chapter of its early days remains a highly sensitive issue at a company where labor representatives have considerable influence on strategic decisions. The Nazis had seized union funds to help finance building the huge Wolfsburg factory.

European Campaign

VW leaders have taken a clear stance to safeguard diversity when right-wing protests triggered violence last year in Chemnitz, an eastern German city where the company operates an engine factory.

Ahead of European elections in May, VW launched a campaign to highlight the importance of EU stability, adopting positions that contrast with AfD’s efforts to abandon the euro and dilute Brussels’ influence on German politics.

To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Chris Reiter, Iain Rogers

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