October 13, 2014 / 5:06 PM / 5 years ago

Employee body at Austria's OMV urges shake-up to end 'damaging' infighting

VIENNA, Oct 13 (Reuters) - The works council employee body at Austrian oil and gas company OMV has called for action to end boardroom infighting in a public spat that could result in the departure of Chief Executive Gerhard Roiss on Tuesday.

In a letter to shareholder representatives, the works council Chairman Martin Rossmann suggested that disputes over strategy has induced paralysis in management of a business for which operating profit halved in the second quarter.

“The executive board’s ability to act must be restored swiftly and consistently - even if appropriate measures must be taken at tomorrow’s extraordinary supervisory board meeting with regard to the board’s personnel,” Rossmann said in the letter, seen by Reuters.

“The break-up of the OMV executive board was clearly visible and noticeable to all employees.”

A third of OMV’s 15-member supervisory board is comprised of works council representatives.

Sources close to the company have told Reuters of clashes over strategy between Roiss and Hans-Peter Floren, head of OMV’s gas division, which contributed only 1 million euros ($1.27 million) to the group’s 2.7 billion euro earnings before interest and tax (EBIT) in 2013.

Tuesday’s meeting will be attended by state holding company OIAG, which holds a 31.5 percent stake in OMV, and Abu Dhabi’s International Petroleum Investment Co (IPIC), which owns nearly 25 percent.

Austrian newspaper Die Presse last week quoted sources in a supervisory sub-committee as saying that both Roiss and Floren’s contracts could be terminated early.

Since Roiss took charge at OMV in 2011, the company has embarked on a strategy focused on exploration projects to cut reliance on margin-squeezed refining and marketing, but has been unable to halt a slide in earnings and share price, which has dropped by a third since the start of the year.

“In light of the changes in market conditions, it will be imperative to (re-)evaluate both the strategy and related risks,” Rossmann said in the works council letter.

“This situation (the boardroom infighting) has made constructive work increasingly difficult. In our opinion, the prolonged continuation of this situation will cause the company severe and lasting damage, thus jeopardising our jobs.”

Austrian Finance Minister Hans Joerg Schelling has declared his displeasure that discussion over the management at OMV, the country’s biggest company by sales, has been played out in the press.

OMV declined to comment on the works council letter. (1 US dollar = 0.7879 euro) (Reporting By Shadia Nasralla, additional reporting by Angelika Gruber; Editing by David Goodman)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below