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gcarter
09-16-2008, 06:56 AM
I know there's a good number of Porschephiles here and that there may be a bit of interest in this article. It's fron Financial Times so I have to paste it because of the subscription.
However, it's interesting because of the bitter debate between Porsche family members, Ferdinand Piech (the son-in-law of Ferry Porsche), and the government...remember Germany is a Socialist country and VW has ALWAYS been a state owned company and is now a large owner still.
Enjoy;

Volkswagen caught in Porsche family feud crossfire
By Paul Betts

Published: September 15 2008 19:08 | Last updated: September 15 2008 19:08

Heinrich von Pierer, the former Siemens chairman and one of the elder statesmen of German industry, describes Volkswagen as a company like no other. The events of the past few days not only confirm his judgment but the company now also looks as if it is becoming ungovernable.

The transition from a state-controlled company to a family-controlled one was never going to be easy. But the way Porsche and its family shareholders have conducted their gradual takeover of Europe’s largest car manufacturer has certainly not helped.

It is difficult to know where to begin to try to understand the complex mess that risks undermining VW at a time when the car industry is facing a tough cyclical downturn. Perhaps it is best to begin with Ferdinand Piëch, the veteran VW chairman and a Porsche family shareholder.

Mr Piëch has long nurtured the ambition of combining Porsche and VW. He seems to have achieved this. He also wants to retain full command of VW and in so doing has provoked a feud with the other Porsche family shareholders that has for the first time gone public.

He has even gone as far as defying the other Porsche family members by tacitly siding with VW’s labour unions and management against Porsche’s efforts to co-operate more closely with VW’s premium Audi brand. As chairman, Mr Piëch has double voting rights at VW. So he can continue to frustrate Porsche’s designs at VW by abstaining or voting with the VW union representatives.

Not surprisingly, Porsche’s chief executive, Wendelin Wiedeking, and Wolfgang Porsche, the sports car company’s chairman, are furious. Mr Porsche has even gone on record to say he is “appalled” by the behaviour of Mr Piëch, his cousin. In other words, he would like Mr Piëch removed.

That is not going to be easy. Apart from pandering to the VW unions and management to stay in power, Mr Piëch seems to be seeking to mend his bridges with Christian Wulff, the president of Lower Saxony, the state that owns 20 per cent of VW and a blocking minority.

In the past, Mr Piëch and Mr Wulff have been the best of enemies. With the European Union breathing down Lower Saxony’s neck to remove its 20 per cent blocking minority, Mr Wulff and his old foe have every reason to be friends. Yet Mr Piëch can clearly not rely entirely on Mr Wulff. The politician could easily switch camp if he considered it in his best interests and vote with the rival Porsche faction against the VW chairman.

The trouble with the situation is that it is not just Mr Piëch who seems to have gone too far. Mr Wiedeking has not helped himself by his assertive and arrogant dealings with VW and its management. He has managed to turn VW’s management against him when it would surely have been in his interest to bring them on board to reinforce co-operation between VW and Porsche.

The other Porsche family shareholders – especially Mr Wolfgang Porsche – seem to be allowing their egos to cloud their judgment at a time when a good old-fashioned German compromise is needed to resolve the situation.

Perhaps the best solution of all would be for all the warring parties to step aside and appoint an inspired outsider to manage the eventual integration of VW and Porsche.

zelatore
09-16-2008, 09:54 AM
Perhaps the best solution of all would be for all the warring parties to step aside and appoint an inspired outsider to manage the eventual integration of VW and Porsche.

uh huh. I see that going over like a ton of bricks....

mjw930
09-16-2008, 09:30 PM
I've been watching this for the last year and it's interesting to say the least. The problem is that the state of lower Saxony must divest itself of their holdings since the EU overturned the "VW Law", a law that was put in place to prevent a non-German company from owning a controlling interest in VW, hence the state owning a blocking minority of the stock.

In an interesting twist, when Porsche made the purchase of more than 30% of VW stock they were required, under a different German law, to commit to purchase an additional 21% making them the majority stock holder. This law again, is there to prevent a non-German company from owning a controlling interest in VW but it has been upheld by the EU.

Dr. W is as arrogant as they come BUT, he has done to Porsche what NONE of the "family" leaders have been able to do, resurrect a company that was close to bankruptcy in the early '90's into the most profitable car company in the world.

Personally, I think Dr. W and Porsche will get what they want. VW is in too much financial trouble for them to remain independent and when the unions realize that the alternative is middle eastern, Russian or Chinese ownership I think they will wake up and kick Piëch to the curb.