VW Chairman Ferdinand Piëch 'out', Porsche execs 'in' at troubled German automaker

Ferdinand Piëch, the brilliant engineer who presided over the triumphant rise and disgraceful fall of Volkswagen during the past 20 years is to be bumped from his post as Chairman of the Board, effective next year. The move comes as a result of a longtime squabble between the automaker's two largest shareholders, Porsche and Lower Saxony, the German state where VW is headquartered. The chair-shuffling will see Porsche's CEO, Wendelin Wiedeking gain a seat immediately, and the sportscar manufacturer's CFO, Holger Härter will likely find a spot at the table come the board's annual meeting this May.

Piëch, who had worked at Porsche in the mid-Sixties, was the man behind such great successes as the LeMans-winning 917 racer, as well as the driving force in Audi's Quattro development program when he began his twenty year stint at the brand in 1972.

Piëch took over VW's top post in 1993, and presided over the firm's phoenix-like rise, garnering what was perhaps the industry's most enviable demographics with its New Beetle, later extending the goodwill to new iterations of the Jetta, Golf, and Passat. During this time, the company also realized major gains in Audi, preaching the gospel of Quattro and finally putting the 60-Minutes 'unintended acceleration' debacle behind it.

But as quickly as the marque gained traction in the marketplace, critics argued that Piëch's increasing megalomania derailed the company's priorities...

[Much more on this development after the jump]

On Piëch's watch, the company bid for Rolls-Royce and Bentley, but were badly outmaneuvered by a competing proposition from BMW. When the dust settled, Volkswagen owned Bentley outright and Rolls-Royce's factory in Crewe, England, but lacked the rights to use the company's fabled name, which the Bavarian Boys had purchased for a song.

And then there's Piëch's relentless effort to push the 'People's Car' upmarket, which many believe is what ultimately precipitated its present financial and public-relations malaise. The move to bring out premium-priced vehicles like the Phaeton (and even the Touareg) was seen by many as a foolhardy conflict of interest in light of the company's ties with Audi and Porsche. By diverting dollars to new segments instead of reinvesting in the company's core lineup, disastrous across-the-board quality issues, badly aging bread-and-butter models and an agitated dealership body (that hadn't clue one as to how to court luxury buyers) came home to roost.

Piëch's removal as chairman and the resulting appointments of Porsche executives can be seen as a major victory for those in Stuttgart, but even some of Volkswagen's hostile shareholders are going on record that they're happy to see Ferdinand go, clearing the way for further necessary restructuring.

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[Source: Bloomberg]