* Volkswagen plans major group overhaul, sources say

* Unions vow massive resistance against large structural

changes

* Workers, Lower Saxony have big say on supervisory board

By Christoph Steitz and Victoria Waldersee

FRANKFURT, June 26 (Reuters) - Volkswagen's plans to close

plants in Germany and nearly double planned job cuts to around

100,000 have put the spotlight on its unique governance and

ownership structure that have drawn criticism from investors for

years.

Like other German conglomerates, the 89-year-old automaker

is the result of decades of expansion and strategy shifts,

resulting in an empire that stretches from mass-market SEATs to

luxury Lamborghinis, as well as stakes in sports car maker

Porsche AG and truck maker Traton.

WHAT IS THE VOLKSWAGEN LAW?

The strong influence of workers dates back to the early days

of Volkswagen before World War Two, when the Nazis built

Volkswagen's main factory in Wolfsburg with money that came in

part from assets expropriated from trade unions.

This, and the use of forced labour, formed the financial

basis of the company. After the war, the British, who were

responsible for the plant at the time, decided to place

trusteeship of the company in public hands.

To this day, the state of Lower Saxony, where Volkswagen is

based and where it operates five of its six western German

assembly plants, has a 20% voting stake.

In 1960, when the company was transformed into a joint-stock

corporation, the so-called Volkswagen law was passed, handing

significant influence to Lower Saxony and workers to protect the

business from outside influence.

WHAT DOES IT SAY?

There are two critical clauses.

Decisions that usually require a three-quarters majority at

the annual general meeting must be passed by more than

four-fifths of Volkswagen shareholders, giving Lower Saxony a

blocking minority.

Any decision to build or move a production plant also needs

approval of a two-thirds majority in the 20-strong supervisory

board, the law says, without specifically mentioning closures.

This means the 10 members on the board representing German

labour can veto any far-reaching plans that affect factories.

WHAT IS VOLKSWAGEN'S OWNERSHIP STRUCTURE?

It's complicated, mainly because there are two different

classes of Volkswagen shares: preferred stock that is listed in

the German benchmark DAX index, and common stock

which carries voting rights.

Most of the group's equity, covering both share classes, is

owned by Porsche SE, the investment vehicle of the

Porsche and Piech families, which holds a 31.9% stake in

Europe's top carmaker.

The German state of Lower Saxony owns 11.8%, while Qatar

holds 10%.

When it comes to voting stakes, however, the picture

changes: With a 53.3% voting stake, Porsche SE holds a majority.

Lower Saxony has 20% of votes and Qatar 17%.

HOW DOES THAT AFFECT GOVERNANCE?

Volkswagen has been criticised by investors for governance

shortcomings that are partly related to its ownership structure,

which gives Porsche SE great control over the company even

though it does not own a majority of all shares.

Volkswagen CEO Oliver Blume gave up his Porsche CEO post at

the beginning of this year after years of criticism from some

shareholders over his dual role as head of two large and related

auto groups.

Along with the market deterioration, governance issues have

added to pressure on Volkswagen's shares, which trade around

16-year lows. Uncertainty over succession at the Porsche and

Piech families, led by Wolfgang Porsche, 83, and Hans Michel

Piech, 84, is also a factor.