Volkswagen AG's top supervisory board group backed CEO Martin Winterkorn, defusing a power struggle with Chairman Ferdinand Piech.
The leadership committee of the German automaker's supervisory board said Winterkorn, 67, was the "best possible" chief executive and had the group's "full support," the six-member body said today in a statement.
The committee, which comprises Piech and five other members, plans to propose to the full board in February that Winterkorn's contract be extended beyond 2016.
"Extending Winterkorn's contract clearly strengthens his position, and it's important for VW to have a strong CEO," said Daniel Schwarz, a Frankfurt-based analyst at Commerzbank AG. "Winterkorn is doing an excellent job."
Winterkorn's future was called into question after Piech told Der Spiegel magazine last Friday that he had distanced himself from his former confidant and no longer wants him as the next chairman. The dressing-down came without explanation and was a surprise blow to an executive that has led the company to record profits and put it within grasp of overtaking Toyota Motor Corp. as the No. 1 in the industry as measured by global sales.
Winterkorn appeared before a meeting of the board group in Salzburg, Austria, on Thursday to fight for his job, as the struggle between Volkswagen's top executives threw Europe's biggest carmaker into disarray.
“The Executive Committee places great importance on the fact that Prof. Dr. Winterkorn will pursue his role as Chairman of the Board of Management with the same vigor and success as before, and that he has the full support of the Committee in doing so,” the statement said.
The committee usually prepares the meetings of the full 20-person supervisory board, which has the power to hire and fire executives. In Germany, executive's contracts are generally only extended in their final year.
In addition to Piech, who is also a member of one of the two families that control VW, the group comprises works council chief Bernd Osterloh; his deputy, Stephan Wolf; Berthold Huber, representing the IG Metall union; Wolfgang Porsche, Piech's cousin and a representative of the other shareholder family; and Lower Saxony Prime Minister Stephan Weil.
Piech, who turns 78 today, had key power players of VW turn their back on him since the Der Spiegel comments in a rare setback for the executive, who has led the automaker for more than two decades.
Piech's future wasn't addressed in the statement. Piech's future "is a separate issue" as he remains a key shareholder of the group, said Commerzbank's Schwarz.