Lower Saxony Vows to Retain Stake in VW

Germany’s Lower Saxony new government has rebuffed pressure by the state’s two largest political parties to alter its stake in Volkswagen AG.

Stephan Weil, the state’s new prime minister, says the 11.8% holding, which represents a 20% voting stake in VW, is critical to the economic development of Lower Saxony, home of the giant carmaker.

Reuters notes that the state’s holding delivers hundreds of millions of euros in dividend payments and business taxes. VW also employs some 120,000 people in the region.

Critics of VW’s bureaucracy and diesel emission cheating scandal have been urging Lower Saxony to back a move to name an executive from outside the auto industry to succeed CEO Matthias Mueller. They also want the state to turn over one of its two VW board seats to a non-political candidate.