• Jul 10, 2009
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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  • 30 Comments
      • 5 Years Ago
      It's like having your parents give up their life savings and take out a 2nd mortgage just for you to go to college and be successful. Now your parents are old and broke so they need to rely on your wealth to help them. Ironic isn't it?
      • 5 Years Ago
      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!
      • 5 Years Ago
      Maybe Piech will have to eat humble pie this time.
      redeemer0591
      • 5 Years Ago
      Its all Porsche's fault for trying to take over VW in the first place
      • 5 Years Ago
      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!"
        • 5 Years Ago
        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.
      • 5 Years Ago
      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?
        • 5 Years Ago
        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.
        • 5 Years Ago
        Shareholders ...
      • 5 Years Ago
      From the most profitable automaker in the world, as of 2004-2007, Porsche turned into a little miserable company governed by the limited circle of short-sighted egos.
        • 5 Years Ago
        turned into? did something change at the management level that hasn't been reported? they've always been this way, it's just karma catching up with them.
      • 5 Years Ago
      How the tables have turned.
        • 5 Years Ago
        I would say that's karma for building the Cayenne in the first place! *grumble grumble*
        • 5 Years Ago
        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...
        • 5 Years Ago
        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
        • 5 Years Ago
        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.
      • 5 Years Ago
      All I have to say is...don't believe everything you read.
        • 5 Years Ago
        but but Reuters has "a source"

        where's the faith in journalism?
      • 5 Years Ago
      Everyone here misses the key factor in the VW / Porsche relationship except, I suspect, Riyad Ali. THE key player in both companies is Dr. Ferdinand Piëch. To those who know the inside of the two companies and who really pulls the strings and who jumps when they are pulled know that Piëch is "the puppetmaster" (as one long time VW person calls him).

      If you don't understand Piëch, you don't understand the VW / Porsche situation or relationship. There is no better strategic thinker in the automobile industry than Piëch. He's had his share of mistakes (like the VW Phaeton) but on the whole he's outmaneuvered the best and the brightest in his own companies and in the auto industry in general. My guess is that he is doing it one more time and maybe just for the pure sport of it or because someone at the board level has pissed him off one too many times. The man behind the mighty Porsche 917 loves winning on the track and in the board rooms.
      • 5 Years Ago
      Interesting and rather amusing turn of events. Time to grab some popcorn :)
      • 5 Years Ago
      I work for Porsche.......don't believe anything you read......and your "source" well what can I say!
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