Homes and offices of Porsche executives were raided on Tuesday, with 10 prosecutors and 176 other personnel participating.

The investigation is into possible excessive compensation paid to the former head of Porsche's works council, a man who left the automaker earlier in 2019 to go into politics.

A tax official is also being investigated for allegedly leaking information to a Porsche accountant, Automotive News Europe reported.

On Tuesday, prosecutors in Stuttgart, Germany, raided Porsche's headquarters, reportedly including the offices of CEO Oliver Blume (pictured above), chief financial officer Lutz Meschke, and HR chief Andreas Haffner. Their purported offense: overpaying the notorious head of the works council, Uwe Hück.

Yesterday's raids were carried out by 10 prosecutors assisted by 176 additional personnel, including police. Data carriers and mobile phones were seized. The raids also covered a second topic: A member of the financial authorities is suspected to have passed secret information to an accountant retained by Porsche.



Hück had a strong impact on Porsche, often weighing in on strategic decisions and product development. His contributions have repeatedly irked company management, but he has played an important role in shaping Porsche's current image and product portfolio. The works council has significant obstructionist powers.

According to Germany's labor law, members of the council should be paid what they would have earned in a typical company career. Hück, who started out as a painter, ended up making the equivalent of about $500,000 per year. It is unlikely that he would have risen to this income bracket on the merit of his performance in the paint shop.

In Germany's reality, members of works councils have often received relatively high compensation. Some of their duties resemble those of actual board members, and companies have often decided to compensate them somewhat generously. The Stuttgart prosecutors blame the company not only for overpaying Hück, but also for writing off the compensation as an expense. Porsche should have paid higher taxes instead, they claim.



Hück himself—who left the company in February 2019 to go into politics through the Social Democrat political party—has not been the focus of investigations. "My compensation was clean," he defiantly told the German newspaper Handelsblatt.



For decades, the German auto industry thrived on the special relationship between carmakers and labor unions. The vaunted "Deutschland AG" (or "Germany, Incorporated") made sure that government and the unions were on board with major strategic decisions, as they had an important, legally acknowledged say. But the system has been falling apart, not least due to several scandals surrounding the Volkswagen Group in the past decade. Now Porsche has become a new center of investigation.

Porsche's statement to local newspaper Stuttgarter Nachrichten was to refuse comment "in light of the ongoing investigation."



Stuttgart's authorities turning on Porsche at a critical time for the company, and placing the blame for alleged disproportionate payments solely on Porsche and not the recipient, proves yet again that times have really changed for German companies.

This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. You may be able to find more information about this and similar content at piano.io