Remarkably, this is not a battle among powerful business interests. It’s an internal family struggle among members of the mighty Porsche and Piech families, who will soon jointly own 51 percent of VW.
As the struggle enters a decisive phase, the winners and losers could be determined in the coming months when the key players hustle for supervisory board seats at the annual shareholder meetings of VW group and its highly profitable Audi premium brand.
The winners could be Wolfgang Porsche and two top executives close to him: Wendelin Wiedeking and Holger Harter.
Losers might be Ferdinand Piech and his allies Martin Winterkorn, Rupert Stadler and Bernd Osterloh.
The players already are making their strategic moves.
At VW’s annual meeting April 24, Porsche Chairman Wolfgang Porsche will gain a seat on VW group’s 20-strong supervisory board. Wolfgang Porsche, head of the Porsche-Piech clan, will join Porsche CEO Wiedeking and Porsche Chief Finance Officer Harter on the board.
The three Porsche bosses will use their board seats to push for high profitability and big shareholder returns at VW.
Many in the industry understand why Porsche moved to gain control of VW. The head of a rival European automaker told Automotive News Europe: “Single-brand, low-volume manufacturers stand no chance on their own. Porsche has clearly seen this.”
In the past VW has focused on going upscale by acquiring brands such as Bentley and on protecting jobs at its German factories.
Wiedeking already has warned that there will be no “sacred cows” at VW, a statement that VW workers believe refers to their wage levels, which are much higher than the industry average.
Opposing the Porsche clan is Piech, VW’s supervisory board chairman, his ally Osterloh, who represents VW’s workers, and Christian Wulf, prime minister of the German state of Lower Saxony, which owns 20 percent of VW.
Piech, Osterloh and Wulf will defend their vision of VW as a maker of exciting but sometimes unprofitable cars such as the Bugatti Veyron super car, and a company that puts social responsibility to its German workforce ahead of shareholder value.
Battle for Audi
At Audi’s annual shareholder meeting May 7, Porsche will move to increase its influence at the premium brand.
Wiedeking and Harter want places on Audi’s supervisory board. The two executives are reported to be unhappy about Audi developing sports cars such as the R8 that rival Porsche’s 911 range. They also want a Porsche version of Audi’s new Q5, which Audi executives are resisting, according to the German media.
Some observers say Porsche wants to spin off Audi so it can pocket the premium brand’s profits directly.
As a counterweight, Piech will put himself forward as a candidate for the Audi board.
Since he became VW group CEO in 1993 and then chairman in 2002, Piech has shown that he is a skilled corporate infighter who should not be underestimated.
But recent events suggest that, for once, things are not going his way.
-- Piech, 70, gave up his seat on Porsche Automobil Holding’s supervisory board to his younger brother Hans Michel, 66, who is said to have friendlier relations with Porsche family members.
-- Wolfgang Porsche is taking a bigger public role and his comments often are at odds with Piech’s.
Piech is not No. 1
Piech’s reign at VW has given him the highest public profile in the Piech-Porsche family. But he is not the most powerful member of the clan. He owns about 13 percent of Porsche and Hans Michel is speaker for the Piech branch.
Piech is not well-liked by many Porsche family members.
In recent months, anti-Piech sentiment has strengthened as he failed to stop his ally Osterloh’s strong public attacks on Wiedeking.
Piech sees Wiedeking as a hired hand who has too much power, but the Porsches trust him to look after their investment in VW. After all, Wiedeking turned the near-bankrupt Porsche sports car maker into the world’s most profitable car company.
Wiedeking’s pressure on VW to become more efficient is likely to increase. “Porsche is successful because the management team has a laser-like focus on the Porsche business,” a senior auto executive told ANE.
With regard to VW, the Porsche and Piech families will have to agree whether the tough approach that worked at Porsche can be applied with equal success to VW with its nine brands and €109 billion in annual sales.
John Revill contributed
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