Q&A: Porsche's boss talks about the carmaker's growth, risks and his future.

Porsche chief
Wendelin Wiedeking, 51, has been chief executive officer of Porsche AG since 1993. Wiedeking, an engineer, also worked for Porsche from 1983 until 1988. Between 1988 and 1991 he had a leading position at the metal company Glyco Metall-Werke in Wiesbaden, Germany.

Stuttgart. Since Wiedeking became the head of Porsche's board of directors in 1993, the sports car manufacturer has gone from strength to strength. Wiedeking explained his plans for future success.

Q: Mr. Wiedeking, discussions about Porsche are becoming boring. You are on a constant upward trend!

A: You can only say it is boring when you don't experience all the sweat behind this success.

And we sweated a lot last year. Our target figure of 65,000 sold cars was a big challenge. When we set this target there was no mention of the conflict in Iraq or the worldwide economic problems. In the end we sold approximately 67,000 cars -- an achievement we are proud of.

Q: Do you find this continuing success story incredible?

A: We are not resting on our laurels. We create our own, artificial problems inside the company. From time to time one has to set new and very unpleasant targets. Sometimes they can be quite painful and of course you will not make many friends that way. But this is the only way to create and maintain the necessary amount of pressure.

Q: People say that perhaps Wiedeking could ease up on the pressure now.

A: As long as I am chief executive officer at Porsche there will always be creative restlessness. We have to remain hungry.

Q: Are you able to tell us about some of the aims of the 2004 belt-tightening program?

A: Everything will be considered: costs, production processes, locations. We have to create the resources necessary to finance the next phase of growth now.

Q: It is said that the Porsche production will rise to between 70,000 and 75,000 vehicles in 2004. Where will you get the capacity?

A: Our plants are very flexible. In Zuffenhausen we have increased production from 20,000 to approximately 34,000 units during the past few years, without the need for additional buildings.

Leipzig also still has room for more capacity. On top of that we have a partner in Finland, Valmet Automotive.

And we are not building a new engine plant in Zuffenhausen for nothing. We will definitely not buy any further capacity as that would only result in additional fixed costs. And we don't need those.

Q: Talking about growth: Can you tell us where you will be building the fourth model range?

A: Slow down now. So far no decision has been made in regard to a fourth model range. However, there will be no competition between our two plants, as we are using all of Zuffenhausen's capacity for the manufacture of both the 911 and the Boxster.

Q: Will you be building this car on your own -- or in a joint venture, such as the co-operation with VW on the Cayenne?

A: Joint ventures can make sense, such as the Cayenne example. However, currently this is not being considered. We will not make the second step before making the first.

Q: It is known that you hate taking risks. What will be the biggest risk for Porsche next year?

A: I want safety in our planning. That is why we are hedged against currency fluctuations for the next three to four years. Many envy us for that. Currently I don't see that there is any uncontrollable risk. We did our homework.

Q: What are the market risks?

A: Being a small manufacturer we are not able to control our market. All we can do is develop attractive products and offer them for sale at a competitive price. Nonetheless, we have to ensure that we can react flexibly to challenges.

We did that this year with the reduction of sports car production by 7,000 units.

I don't like to think about what would have happened if we had been able to sell them. We could have ended up with an even higher turnover. If that had been the case, you would see an even happier CEO in front of you.

Q: The working-hours accounts of many of your employees in Zuffenhausen show a deficit due to production cuts. For how long will this continue?

A: Our employees understand the corporation's strategies. And they accept that they have to contribute something too so that the company can continue being successful.

During the past few years we had extra shifts at Zuffenhausen and employees collected their overtime. Their accounts looked very good then.

Of course we knew that the number of sold sports cars would not always remain at this same high level. This is part of the system.

Still, at some point we will have overtime and extra shifts again. However, I don't want to tell you when exactly.

Q: Short-time work is not being considered?

A: This is absolutely out of question. It makes more sense for Porsche to extend the Christmas holidays and not to work on bridging days (days after or before public holidays).

Apart from that both shifts are working at full speed. We also disapprove of short-time work because we want to pay for our employees' working hours ourselves. We don't need any support from the labor exchange.

Our workers will still be paid their full wages and the highest bonus pay within the automotive industry.

Q: Do you regret that you have limited the Carrera GT production to 1,500 units?

A: One has to remain realistic despite all the enthusiasm. The market for this segment is very limited. Besides, limited editions are more attractive to collectors. There are a lot of customers who want to have a specific number that we happily reserve for them.

Q: The Cayenne is approaching an annual production of 30,000 units. Is the volume limited due to the body shell joint venture with VW?

A: We always want to be able to react flexibly to the demand -- and also if the demand grows. We have defined capacities with our suppliers accordingly. However, we must not forget that the Cayenne is a premium car that has to be kept exclusive. 30,000 is still an exclusive amount.

Q: Despite the six-cylinder Cayenne being positioned in a more popular price region?

A: The six-cylinder model is the basic model, which will lead the customers to the Cayenne S, maybe even the turbo. The market for the Cayenne will work in a similar way to that of the Boxster: A Boxster driver will at some point change to the Boxster S and then to the 911.

Q: Porsche's stock corporation has already reached the 1 billion euros profit mark. When will the Group reach the billion mark?

A: We have very specific goals. We remain very ambitious, despite our current success. We want to continue being successful, which is the only way of securing our independence long-term. It is worth working hard towards that.

On top of that the auto businesses is becoming increasingly expensive. Higher environmental and safety standards have their price.

We don't want to make our future dependant on banks so we have to earn the necessary finance ourselves.

It is not an easy path but it is the only one with a future. That is all I can say.

Q: For how long will Wendelin Wiedeking remain head of Porsche?

A: I do intend to retire at some point.

Q: Here at Porsche?

A: Why not? I like being at Porsche. I have had some very interesting offers during the past few years. None of them were good enough to tempt me away.

I am convinced that a long term of office at Porsche will bring added value -- for the company and for myself.

The boss knows his team and the team knows its boss. A team of people who are used to each other just works better. Apart from that I like the people at Porsche. They work hard and are confident. I find that impressive.

Q: Are politics of any interest to you?

A: No. I wouldn't have the patience for that. That said, I will always meddle in political discussions if Porsche's interests are concerned. That is what I understand as a corporation's social-political responsibility. This is another way of being involved in politics.

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