Friday 24 November 2017

Newsmaker: Ferdinand Piech

Volkswagen chairman Ferdinand Piech
Volkswagen chairman Ferdinand Piech

Volkswagen's powerful chairman Ferdinand Piech suffered an unprecedented defeat on Friday after a top panel at the famed German car-maker backed Martin Winterkorn to remain as chief executive.

Piech, the patriarch of Volkswagen's founding family, had provoked a showdown with Winterkorn by planting a comment in weekly magazine 'Der Spiegel' recently that he had "distanced himself" from his chief executive.

A top Volkswagen committee met in Salzburg on Thursday to try to resolve the row and it gave Winterkorn its full backing.

Piech, the 78-year-old grandson of VW Beetle inventor Ferdinand Porsche, has a history of ending the careers of top executives with similar remarks planted in the media.

But this time the powerful works council chairman Bernd Osterloh, a member of the executive committee, stuck by Winterkorn, who has included labour representatives in the planning of vast cost cuts rather than excluding them.

Piech was, by all accounts, isolated on the supervisory board's steering committee which on Friday backed Winterkorn, outnumbered 5:1 on the six-member committee.

It was an embarrassing and high-profile defeat for the patriarch.

It's not clear what happened behind the scenes to cause such ructions between Piech and Winterkorn that would lead the former to declare that he was distancing himself from his chief executive.

In his two decades atop Volkswagen, Piech has perfected a style that pairs a cult-like following inside the German company with razor-sharp remarks to outsiders.

This time, though, his target was a long-time confidant and VW's most successful chief, as the company they built together rakes in record earnings and looks set to claim the top spot in the global car market from Toyota. this year.

"Winterkorn is a different calibre than some of Piech's previous targets, if you look at the enormous development VW has taken under his tenure," said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler.

It was clear on Thursday that at least some of Piech's power remained intact. When Winterkorn was asked to step before the board's leadership committee, they didn't meet in Wolfsburg.

They flew to Salzburg, Austria, where Piech has his office.

The story, therefore, may not be over yet.

After Piech called the career of Winterkorn's predecessor Bernd Pischetsrieder into question, the board unanimously extended his contract only to fire him a few months later. But unlike the current situation under Winterkorn, the VW brand was losing money at the time. Watch this space.


Ferdinand Piech

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