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.
Weigh in with your thoughts on Volkswagen's boardroom shakeup by leaving a comment.
[Source: Bloomberg]
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Reader Comments (Page 1 of 1)
Krishna Das 8:24PM (1/21/2006)
Bringing in Porsche execs ? I thought they screwed up with the Cayenne.. a dumbass being replaced by another.. Check out how the JD power rating of the Porsche brand fell.
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Hemanth 8:50PM (1/21/2006)
Interesting that Piech is out, while Porsche's people are in as Piechs' family (the original Dr. Ferdinand Porsche family) own Porsche! Am I wrong?
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Alan 9:30PM (1/21/2006)
It's about time. The internal squabbles are distracting VW from the important business of building cars. The new chairman is to be independent of both Porsche and the German state of Lower Saxony (the two largest shareholders in VW).
Most importantly, VW is going to extend Bernd Pischetschriedter's contract as CEO. At BMW, he was the one who bought the Rolls-Royce name for a song (besting Piech), and helped make BMW the second most profitable car company on a per-unit basis (second only to Porsche). Of course, he brought in Chris Bangle, but nobody's perfect.
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M. Harris 9:58PM (1/21/2006)
I lived in Stuttgart for 18 years, and I know for a
surety that Herr W. Wiedeking is the one that wanted to build the cayenne super German SUV. Even after Herr
Porsche said to them (company execs) never build a 4dr.
Porsche. Because this would hurt the company sports car
image. Now, VW wants to brag about this man? Oh boy! I
hope they know what a tyrant of a mann, that they are
going to be dealing with in the few years he's going to be working on the folks-wagen time clock. Before they call it feier-abend with him also.
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Chris 10:04PM (1/21/2006)
Yeah, bringing out a car that brings in more money than your company ever could have imagined really was a TERRIBLE idea...
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ebm14 10:15PM (1/21/2006)
Bernd Pischetschriedter's role crippled the entire MG-Rover venture amd I think he made VW into a mess. Piech (the old man) should have never stepped down. Pischetschriedter also wanted the not so popular Z3 and Z4 to take flight and for BMW to opened up a plant in S.Carolina. Do you think the laborers in Lower Saxony like Pischetschriedter for taking away jobs? Hell no. And now they want to build a minivan with Chrysler...what?????????????????
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ebm14 10:20PM (1/21/2006)
W. Wiedeking idea of a SUV is ok but it should have look more Porsche.
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ebm14 10:20PM (1/21/2006)
W. Wiedeking idea of a SUV is ok but it should have looked more Porsche.
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Gary B 10:41PM (1/21/2006)
Yeah Wiedekings Cayenne may not be everyone's idea of Porsche...but I believe they sold 40,000 of them last year. More than the 911 (23000) and Boxster (13000) combined. From the boards perspective, it's all about the $ (or the DM).
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J.N. 11:39PM (1/21/2006)
So the minivan tie-up with Chrysler is a bad idea? Wait until you see the fruits before you call the tree ugly, OK???
I won't argue that Piech did some stupid, really stupid things. If it wasn't for who he is, he'd probably have been "outta there" years ago. 'Nuff said about him.
In the recent past, probably the best things that have happened to VW are people, specifically Pischetsrieder and Bernhard.
Don't blame Pischetsrieder for the MG Rover debacle. He tried everything to make a go of it and, sure, he failed. But so did everyone else who tried to save the last UK automaker.
Bernhard did a great job at Chrysler, and we're just now seeing the results of that in their new products. He may have been like Icarus, flying too close to the sun at DCX, but he got the last laugh on ol' Schrempp, didn't he? By that, I mean he's still working in the industry, and Juergen is out on his keister. That's justice, folks. If Wolfie gets to cut loose and work his magic on VW, by whatever means necessary -- up to and including such tie-ups as the Chrysler minivan deal -- then more power to him!
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ebm14 12:51AM (1/22/2006)
Personally, I think Bernhard is getting close with Chrysler just in case he needs another job. There was nothing wrong with importing the hot selling Toran to the States. Why hand more DM over to DCX and not just save it or invest it for future growth or emergency use.
I dont hate VW since I own a GTI but I think the Germans are unestimating our taste and pride in owning real foreign cars. Nobody really respects rebadge-engineering. I think the US is tired of what GM does with their brand and VW board memebers should be listening.
Actung Baby
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Niels L the X5 guy 1:43AM (1/22/2006)
I recently arbitrated and won the right to sell my Touareg back to VW...change at the top will mean nothing if the dolts in Auburn Hills refuse to understand customer service. We were the ideal 2-VW couple, we are now a two-BMW couple...and I'm sorry, but who was the moron who greenlighted the Phaeton...or a "big Passat" as my neighbor described the loaner I had while the Touareg was in the shop. Management HAS to shake up the old school thinking of the American VW dealers or they will have the same market share as Fiat.
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Stephan Kippe 6:44AM (1/22/2006)
Come on guys,
I don't like the Cayenne either, but Wiedeking is one of the best managers in the automotive business. When he took over as Porsche CEO in 1992 the company was on the brink of extinction. 1991 the company built below 20,000 cars and had a loss of EUR66m, now Porsche builts over 80,000 cars a year and is the most profitable carmaker in the world (better margins than Toyota). So who's the dumbass, #1?
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Marcus 2:21PM (1/22/2006)
When the Cayenne came out I was shocked and appalled. I am still saddened by Porsche's need to make a car they knew a bunch of people would buy. What I think is far worse, however, is how much Volkswagen, Audi, and Porsche have been tainted by quality-control issues. I wouldn't buy a Cayenne, but that's not because I'm a purist. I wouldn't buy a Cayenne because they're poorly constructed and unreliable. My sister's RX300 runs like a top and every button in it is its own tactile pleasure. The point is that arguments about Wiedeking in regards to sacrifices about SUVs or the Panamera will be irrelevant unless Volkswagen, Porsche, and Audi can get more quality and value from their products.
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Dr. Woo 5:37AM (1/23/2006)
M. Harris: "Even after Herr Porsche said to them (company execs) never build a 4dr."
I'd like proof of this.
The premise behind Porsche as a brand was to build exciting, practical high-end sportscars that you could drive daily and not worry about astronomical repair costs every 1,000 miles. The "Ferrari for John Everyman." So far, I honestly can't say I can think of a Porsche that was blatantly against Ferry Porsche's original plan for the company, save for the Cayenne or maybe even the 912. But if the Cayenne is a necessary evil for Porsche to continue to be profitable and to return to Le Mans (P2 class), then I say keep 'em coming.
Porsche will build the Panamera themselves, in-house, free of VW platforms and parts, using their own engines and engineers. It will be true to the original vision for Porsche AG, despite what you may think about four-door vehicles in the Porsche stable.
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