AGL 40.20 Decreased By ▼ -1.30 (-3.13%)
AIRLINK 129.11 Increased By ▲ 1.11 (0.87%)
BOP 6.60 Increased By ▲ 0.34 (5.43%)
CNERGY 4.03 Decreased By ▼ -0.10 (-2.42%)
DCL 8.45 Increased By ▲ 0.01 (0.12%)
DFML 41.25 Increased By ▲ 0.56 (1.38%)
DGKC 87.00 Decreased By ▼ -0.90 (-1.02%)
FCCL 33.35 Decreased By ▼ -0.75 (-2.2%)
FFBL 65.90 Decreased By ▼ -0.43 (-0.65%)
FFL 10.54 Decreased By ▼ -0.02 (-0.19%)
HUBC 110.70 Increased By ▲ 2.00 (1.84%)
HUMNL 15.23 Increased By ▲ 0.77 (5.33%)
KEL 4.78 Increased By ▲ 0.13 (2.8%)
KOSM 7.83 Increased By ▲ 0.50 (6.82%)
MLCF 41.90 Decreased By ▼ -0.82 (-1.92%)
NBP 60.50 Decreased By ▼ -0.34 (-0.56%)
OGDC 182.80 Increased By ▲ 3.83 (2.14%)
PAEL 25.36 Decreased By ▼ -0.34 (-1.32%)
PIBTL 6.26 Increased By ▲ 0.20 (3.3%)
PPL 147.81 Increased By ▲ 1.66 (1.14%)
PRL 24.56 Decreased By ▼ -0.35 (-1.41%)
PTC 16.24 Increased By ▲ 0.10 (0.62%)
SEARL 70.50 Increased By ▲ 0.30 (0.43%)
TELE 7.30 Increased By ▲ 0.08 (1.11%)
TOMCL 36.30 Increased By ▲ 0.10 (0.28%)
TPLP 7.85 Increased By ▲ 0.01 (0.13%)
TREET 15.30 Decreased By ▼ -0.29 (-1.86%)
TRG 51.70 Increased By ▲ 1.34 (2.66%)
UNITY 27.35 Increased By ▲ 0.45 (1.67%)
WTL 1.23 Decreased By ▼ -0.01 (-0.81%)
BR100 9,842 Increased By 47.4 (0.48%)
BR30 30,036 Increased By 389.6 (1.31%)
KSE100 92,520 Increased By 499.1 (0.54%)
KSE30 28,786 Increased By 121.7 (0.42%)

FRANKFURT: Commerzbank's chief executive and chairman were under pressure from activist investors to axe jobs, but they decided to go first after a damaging clash with unions last week, sources close to the situation told Reuters.

With nearly 12,000 jobs at stake, a quarter of the Commerzbank workforce, divisions came to a head when labour representatives blocked a supervisory board meeting to discuss the future of Germany's second largest bank.

Although precipitated by a public campaign for change by US activist investor Cerberus, one of its top shareholders, the sudden resignations of both CEO Martin Zielke and chairman Stefan Schmittmann came as a shock.

Even Cerberus, which has called Commerzbank "disastrous", had wanted an orderly transition, firstly with changes to its supervisory board, and then to its management.

But behind the scenes, unions were working on their own separate resistance campaign. This played a significant role in the upheaval, interviews with those involved and documents show.

Union officials, irate that Commerzbank's management refused to provide them with documentation to prepare in advance of a supervisory board meeting, cried foul and got it called off.

"Not in our name! Why Verdi got a supervisory board meeting postponed", the union said in a two-page flyer to employees.

While underscoring the enduring power of organised white-collar labour in corporate Germany, the episode has also prompted some of Commerzbank's biggest shareholders to call privately for improved dialogue with the unions, whose representatives make up half of corporate boards.

One of Commerzbank's top shareholders believes Zielke and Schmittmann had a bad track record working with staff, and that this must change, a person with direct knowledge of the investor's thinking said.

"This is a chance to restart the relationship."

A person close to Zielke and Schmittmann said that they did their best to work with labour, but 40 different works councils at Commerzbank, each with competing interests, complicated this.

"There were too many open flanks," a boss of the Verdi union, Jan Duscheck, said after the resignations, citing unruly investors and job cut proposals. "In the end, the conflict with Verdi and the works councils came to a head."

For Stefan Wittmann, a Verdi union official who sits on Commerzbank's supervisory board, the issue is not so much about job cuts but the strategy the bank has for those who remain.

"A strategy against the interests of the workforce is doomed to failure," Wittmann told employees.

The sudden departure of Commerzbank's top management duo means that a board meeting planned for Wednesday is more likely to focus more on its leadership turmoil than its strategy.

Comments

Comments are closed.