Autoblog

Porsche suffers $6.6B loss thanks to VW share writedowns

Chris Shunk — Tue, 17 Nov 2009 08:58:00 EST

Filed under: Porsche, Volkswagen, Earnings/Financials

In 2008, Porsche ended its year with a ginormous 8.5 billion euro profit. Pretty amazing for a company that only makes 100,000 vehicles per year. Or not. As it turns out, Porsche's profits had everything to do with the German automaker's plan to buy out the much larger Volkswagen Group, and Porsche's considerable amount of VW stock options shot up in value to over 1,000 euros per share, making Porsche look like the financial genius of the 21st century.

Here we are in 2009 and Porsche's fortunes couldn't have shifted more. The freezing of the credit markets plus Porsche's enormous 10 billion euro debt-load led to VW performing a reverse takeover of its fellow German automaker. All those VW shares and stock options? VW shares are at its lowest price in over two years, leading to a year-end write down loss for Porsche of 4.4 billion euros ($6.6 billion US) for the year. The loss is far greater than Porsche expected earlier in the year, as the German automaker in June estimated its yearly profit of nearly $1 billion.

As part of its huge loss, Porsche drastically cut its dividend to .05 euros per preferred share. The move is considered to be "symbolic", or as we like to call it, "not what shell-shocked investors were hoping for." VW will reportedly purchase 49 percent of Porsche by year-end for 3.9 billion euros ($5.8 billion US), with hopes of obtaining the outstanding Porsche shares by 2011.

[Source: Automotive News - Sub. Req. | Image Source: Nigel Treblin/Getty]

Porsche suffers $6.6B loss thanks to VW share writedowns originally appeared on Autoblog on Tue, 17 Nov 2009 08:58:00 EST. Please see our terms for use of feeds.

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VW Piech era could be drawing to close, family planning coup

Sam Abuelsamid — Mon, 15 Sep 2008 08:02:00 EST

Filed under: Hirings/Firings/Layoffs, Porsche, Volkswagen

For the past 15 years Ferdinand Piech has been the guiding force behind Volkswagen, first as CEO and Chairman, and since his mandatory retirement in 2002, as Chairman of the Supervisory Board. Before that he headed Audi and helped to cultivate the four-ringed brand's engineering reputation. However, the Piech era may be drawing to a close as the Porsche takeover of VW looks set to break out into intra-family warfare. While Porsche is public company, much of the voting control is held by members of the Porsche and Piech families, the children and grandchildren of founder Ferry Porsche. While little has been said publicly about what is going on in the boardroom at Porsche and the companies reasons for taking control of VW, Piech has been in the peculiar position, being on both sides of the takeover battle. Earlier this year there were reports that Piech was trying to oust Porsche CEO Wendelin Wiedeking in order to maintain control of VW. It now appears that Piech's own family may have had enough of his control, and cousin Wolfgang Porsche is reportedly preparing to push him out. Piech apparently stayed away from a board meeting on Friday to avoid voting with or against his family on the issue of Porsche cooperating with Audi. The family is apparently incensed at Piech's behavior and want him dismissed.

[Source: Automotive News - sub. req'd]

VW Piech era could be drawing to close, family planning coup originally appeared on Autoblog on Mon, 15 Sep 2008 08:02:00 EST. Please see our terms for use of feeds.

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Porsche tells VW: We won't eat you until after the holidays, Merry Christmas

Jonathon Ramsey — Wed, 28 Nov 2007 13:04:00 EST

Filed under: Etc., Europe, Porsche, Volkswagen

Porsche got what it wanted with the repeal of the "Volkswagen Law", but has done nothing yet but stand over its prey, waiting for... well, nobody knows what Porsche is waiting for. However, Porsche CEO Wendelin Wiedeking has told VW that the smaller company will not make Christmas dinner of the larger: Porsche will wait until after the holidays to take majority control of Volkswagen.

His exact words were "Christmas is the holiday of peace; let's create a little harmony." Yet there doesn't seem to be much of that going around. Porsche created a new board structure, and the board will have six seats. Porsche and VW workers thought that meant that each company got three seats each. VW, with 324,000 workers to Porsche's slightly-less-than 12,000, doesn't like that arrangement, so it's suing for more seats. Wiedeking clarified the board structure to say that either company could have as many seats as both sides could agree to -- but that he wouldn't go against Porsche employees' expectation of three.

So no one knows how the transaction will play out -- and to hear Wiedeking tell it, that includes him. "Even now," he said, "none of the players involved knows how many moves will still be required and how long it will take until the game is finally over." If this were a movie, he would then laugh maniacally, stroke the white cat in his lap, and hit the big red button on the console in front of him. But it's not. So, like everyone else, we'll just wait and see.

[Source: IHT]

Porsche tells VW: We won't eat you until after the holidays, Merry Christmas originally appeared on Autoblog on Wed, 28 Nov 2007 13:04:00 EST. Please see our terms for use of feeds.

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