Porsche considering selling 49% of sports car business to VW?
Porsche has clearly gotten itself in way too deep in its attempt to take over control of Volkswagen, and now it's scrambling to find a way to relieve some of its crushing debt load. In addition to the possible €5 billion investment (nearly $7 billion USD) from Qatar, Reuters is reporting that Porsche's board is going to consider selling part of its car business to Volkswagen. VW AG has proposed a full merger, a plan that Porsche is resisting. Instead, it could sell them a 49% stake in Porsche AG, the car business.
Ironically, this whole ordeal began as Porsche tried to ensure that it retained access to Volkswagen systems and future components so that it could stay independent. Now, Porsche looks to be trying to avoid being subsumed into the company once pegged as its savior. Supervisory board Chairman Wolfgang Porsche has called a special meeting of the board for July 23 to discuss the company's options.
[Source: Reuters | Image: Nigel Treblin/Getty]
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Reader Comments (Page 1 of 2)
Bird 1:32PM (7/10/2009)
How the tables have turned.
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zamafir 1:47PM (7/10/2009)
yeah but we (incl autoblog) saw this coming a while ago. I didn't think Porsche could simply 'charm' vw into ignoring the debt they owe them, I know a few members of that esteemed family (on the porsche side) who are going to be pretty angry their power play failed so epically.
Josiah 2:04PM (7/10/2009)
...you win some, you lose some. Porsche got seriously drunk on Cayenne profits and swung for the fences. Bad economic timing (and over-reaching) did the deal in.
Redline 2:45PM (7/10/2009)
I would say that's karma for building the Cayenne in the first place! *grumble grumble*
Ligor 3:25PM (7/10/2009)
they did it to them selves
even as they saw the auto ecomonic downturn they went ahead an borrowed themselves to trouble
and then they complain that the GT-R isn't as fast as it is caus ehte Porsche driver can't do it
hahah
LMAO at Porsche right now
Fox 4:24PM (7/10/2009)
Indeed, it really shows how greed and reaching beyond ones limits can get oneself in trouble.
Why Porsche which was so profitable, so healthy, so independent try to buy a company many times its size is just beyond belief. And whatever banks provided the funding it would be another case of bad debt...
Delighted for VW that they can now get their sizable teeth into Porsche, and especially for Audi that they can go ahead with their own sportscars...
nastinupe 1:50PM (7/10/2009)
Major fail for Porsche. They should have just used the Cayenne as their bread and butter and made a $200,000 high end mid engined car instead of the Carerra GT and called it a day.
They already have a built in consumer base. Why is everyone so greedy?
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Josiah 2:00PM (7/10/2009)
Shareholders ...
zamafir 2:23PM (7/10/2009)
well and the need to, you know, take advantage of vw's might to lower porsche's cost and steer platform development in the direction most advantageous to porsche... which gets back to greed.
Andre Neves 1:53PM (7/10/2009)
All I have to say is...don't believe everything you read.
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Josiah 2:06PM (7/10/2009)
but but Reuters has "a source"
where's the faith in journalism?
dwaltr 1:59PM (7/10/2009)
Their whole marketing plan was based around telling anyone that would listen that they are the most profitable car company in the world AND their independent.
Whoops!
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dwightB 2:01PM (7/10/2009)
AHAHAHAHAHAHAHAHAHAHAHAHAHAHA! [deep breath] AHAHAHAHAHAHAHAHAHAHAHAHAHAHA!
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Josiah 2:06PM (7/10/2009)
Which would you rather be? GM or Porsche?
d4rez 5:38PM (7/10/2009)
Yes that's an easy question isn't it. One is a renowned sports car manufacturer who until this point had a great track record. The other, conversely, is bankrupt. Whatsmore one makes world class cars the other has but a glimmer of promise in it's vehicle line-up, nothing more.
dwightB 5:46PM (7/10/2009)
Josiah, where the hell does GM enter into this? There are MANY other manufacturers that know how NOT to run a business into bankruptcy. And in fact, my answer is "Toyota."
Amien 5:57AM (7/11/2009)
+1
Also,
...HAHAHAHHAHAHHAHHAHAHAA......
LMBVette 2:12PM (7/10/2009)
Peter De Lorenzo over on Autoextrimist has been ripping on Porsche management for quite awhile..talking how they were operating on smoke and mirrors about how they "were the most profitable automobile company in the world" was total BS.
To quote Lloyd Bridges in Hot Shots Part Deux: "Looks like the upper hand, is on the other foot!"
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FitFan 6:21PM (7/10/2009)
Gotta love mixed metaphors.
I think Porsche does have some of the highest profit margins in the auto industry. Their current problem is tied to debt associated with the VW mess.
Think about it. Their lowest margin car goes for $50,000 and costs them what to make?
There's no way they were the most profitable on an absolute basis. No company is close to Toyota in that metric.
BluePariah 2:19PM (7/10/2009)
This family in-fighting is fascinating. I'd love to hear what goes on at the Piech -Porsche Christmas parties.
Good move on VW's part though. Classic Ali Rope-a-Dope technique. Let Porsche expend a bunch of energy going after the big KO and then when they get in over their heads, POP... join us or die.
Clever.
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