FRANKFURT — The billionaire families that control BMW and Volkswagen Group have become a stumbling block as German automakers seek to convince the government to agree on incentives to revive demand for new cars.
Germans want to know why taxpayer funds should go toward helping the automakers when they are not canceling shareholder dividends or executive bonuses. The economic hit caused by the coronavirus pandemic means that many family-owned restaurants and small stores face the loss of their livelihoods.
BMW plans a shareholder dividend payment of €1.65 billion ($1.78 billion). The payout was expected to be approved at the automaker's annual meeting last week.
Ahead of the meeting, Deutsche Bank's fund management arm, DWS Group, said the automaker should consider a lower payout to protect its balance sheet. Germany's DSW investor lobby group said it wants BMW to be more frugal given that it's asking for state-funded car-buying incentives and is sending thousands of workers home at reduced wages.
BMW has about 20,000 employees on short-time work where the state pays most of their wages. The company said paying the dividend is important for investor confidence. "Reliability toward our investors creates trust and maintains the attractiveness of BMW AG as an investment," it said in a statement on March 18.
BMW's controlling shareholders are the youngest children of Herbert Quandt, the German industrialist credited with BMW's revival after World War II. They are Susanne Klatten, who is Germany's wealthiest woman, and her brother, Stefan Quandt. They are listed as owning 46.8 percent of the automaker's shares and will earn a combined $787.6 million from the payout.
Volkswagen Group is distributing more than $3.5 billion to investors for the 2019 calendar year. More than $1 billion will go to the Porsches and Piechs, whose holding company has just increased its stake in the automaker to 53.3 percent.
