Wendelin Wiedeking walks
The Porsche-Volkswagen buy out saga has claimed its first major scalp with Porsche CEO Dr Wendelin Wiedeking resigning today. This is a stunning turn of events, given the state of play just a few months ago in January, and Volkswagen is now likely to turn the tables and take control of Porsche. This would make Porsche the tenth brand under the Volkswagen umbrella. Although expect this to be played out as a Volkswagen-Porsche merger.
Volkswagen buy out talks first emerged in April, but this was quickly followed by happy merger talks in May. However, it seems Dr Wiedeking’s insatiable appetite for Volkswagen shares was his undoing. The cost of buying up big has put Porsche â‚¬10bn in debt. No surprise, then, that this has created some friction at board level with Wiedeking forced to swallow his pride by seeking further capital investment from Porsche family owners.
Porsche has also been courting financial input from a Qatar investment fund and it is now believed this will form part of the latest plans to rescue the Stuttgart company.
Porsche Chief Financial Officer, Holger Haerter, will join Wiedeking in making an immediate departure. Other key executives are believed to be “in between jobs” as well.
Still, it hasn’t been all bad news for Wiedeking who joined Porsche as CEO back in 1993 when the company was on its financial knees. Through smart production techniques and a focused product line he saw Porsche reach a level where they could boast the highest profit margins in the automotive world. Oh, yeah, he’s getting a â‚¬50 million pay out, as well. This, after reports suggest he earned â‚¬77 million in 2008.
Clearly, I’m doing it wrong!
UPDATE: Comprehensive coverage of these events can also be read at Spiegel.de.
UPDATE 24 July: A joint statement from Volkswagen and Porsche can be read after the jump.
[Source: Bloomberg & Times Online | Thanks to Dmitry for the tip]
Broad Approval for Integration of Volkswagen and Porsche
Wolfsburg/Stuttgart, July 23, 2009 â€“ The Supervisory Board meetings of Volkswagen Aktiengesellschaft and Porsche Automobil Holding SE which took place in Stuttgart on Thursday cleared the way for an integrated automotive group combining Volkswagen and Porsche. The details of a final joint concept will be worked out over the coming weeks. Representatives of the Porsche and PiÃ«ch families, the State of Lower Saxony and the workforce of both companies have however already expressed their great satisfaction with the foundations that have now been laid.
The Chairman of the Supervisory Board of Volkswagen Aktiengesellschaft, Dr. Ferdinand K. PiÃ«ch, sees the integrated group clearly on course for success: â€œTogether, Volkswagen and Porsche have all it takes to occupy a leading position in the international automotive industry.â€ Talking in Stuttgart, Dr. Wolfgang Porsche emphasized that todayâ€™s resolutions represented a landmark decision and a milestone achievement for the future, adding: â€œPorsche will preserve the myth and identity of the Porsche brand in the integrated group. That brings new prospects for growth.â€
The labor representatives Bernd Osterloh, Chairman of the Group Works Council of Volkswagen, and Uwe HÃ¼ck, Chairman of the Group Works Council of Porsche, were extremely positive in their assessment of the perspectives for the integrated group. According to Osterloh: â€œWe are definitely heading in the right direction. Over the coming weeks, we must make sure the employees benefit from the new perspectives, too.â€ HÃ¼ck commented:
â€œPorsche will retain its independence in the integrated automotive group. Porsche must remain Porsche.â€ The Prime Minister of Lower Saxony, Christian Wulff, underlined that the solution represented the best course for both companies: â€œThis solution accommodates the interests of all concerned and safeguards the strength and performance of Germanyâ€™s automotive industry.â€