Leadfoot
March 12th, 2008, 12:49
<OBJECT class=inlineimg id=ebReportingFlash title="Big Grin" style="BORDER-RIGHT: 0px; PADDING-RIGHT: 0px; BORDER-TOP: 0px; PADDING-LEFT: 0px; PADDING-BOTTOM: 0px; MARGIN: 0px; OVERFLOW: visible; BORDER-LEFT: 0px; WIDTH: 0px; PADDING-TOP: 0px; BORDER-BOTTOM: 0px; POSITION: absolute; HEIGHT: 0px; textAlign: left" codeBase=http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=4,0,0,0 alt="" data=data:application/x-oleobject;base64,IGkzJfkDzxGP0ACqAGhvEzwhRE9DVFlQR SBIVE1MIFBVQkxJQyAiLS8vVzNDLy9EVEQgSFRNTCA0LjAgVHJ hbnNpdGlvbmFsLy9FTiI+DQo8SFRNTD48SEVBRD4NCjxNRVRBI Gh0dHAtZXF1aXY9Q29udGVudC1UeXBlIGNvbnRlbnQ9InRleHQ vaHRtbDsgY2hhcnNldD13aW5kb3dzLTEyNTIiPg0KPE1FVEEgY 29udGVudD0iTVNIVE1MIDYuMDAuNjAwMC4xNjQxNCIgbmFtZT1 HRU5FUkFUT1I+PC9IRUFEPg0KPEJPRFk+DQo8UD4mbmJzcDs8L 1A+PC9CT0RZPjwvSFRNTD4NCg== border=0 classid="clsid:D</OBJECT>
Porsche boss realises dream with VW takeover
Last Updated: 12:03am GMT 09/03/2008
<!--NO VIEW-->
Russell Hotten on why European motoring industry's godfather is engineering creation of world's largest auto maker
Ferdinand Piech, the godfather of Europe's motor industry, says he has learned a lot from reading books about family dynasties. The first generation creates the business, the second consolidates it, and the third destroys it. Piech - a member of the third generation Porsche clan - is about to prove if this is true.
News from the transport and auto world (http://www.telegraph.co.uk/money/main.jhtml?menuId=242&menuItemId=10288&view=HEADLINESUMMARY2&grid=F7&targetRule=14)
<TABLE cellSpacing=0 cellPadding=0 width=358 align=right border=0 hspace="0"><TBODY><TR><TD width=8 rowSpan=2></TD><TD width=350><CENTER>http://www.telegraph.co.uk/money/graphics/2008/03/09/cnpiech09.jpg</CENTER></TD></TR><TR><TD class=caption><CENTER>Gearing up: Porsche has built a 51 per cent stake in VW
</CENTER>
</TD></TR></TBODY></TABLE>Last week family-owned Porsche, the iconic maker of sports cars, took control of Volkswagen, Europe's largest automotive manufacturer. Piech has historic, emotional and financial ties to both companies. Bringing them together was a dream; the 70-year-old's crowning glory. "Ferdinand The Second: King of Cars" said a headline in the normally sober German business daily Handelsblatt.
On Monday, just as Porsche was taking its Volkswagen stake above 50 per cent, VW was itself putting the finishing touches to a takeover of Sweden's Scania. The result is a global industrial giant that includes two producers of heavy trucks, and carmakers Audi, Bentley, Lamborghini, Seat and Skoda. The combined group now has 11 marques - one less than the number of Piech children.
But despite 12 offspring, by four women, Piech-watchers say that car companies are his real family. And there are no other brands closer to his heart than Porsche and Volkswagen. Piech chairs Volkswagen's board, and until last week sat on Porsche's supervisory council, a position now occupied by his brother Hans Michel. Bringing the companies together has been a controversial and Herculean task. But Piech's struggle is not over. Not all investors and insiders at the companies are happy.
Their worry is that this takeover by Porsche has been driven not by financial and industrial logic, but by passion. The billionaire Piech, a brilliant engineer in his day, has petrol in his veins and a burning desire to put the Porsche family name up there with Ford.
<OBJECT class=inlineimg id=ebBannerFlash_0_3004963060096218 title="Big Grin" style="BORDER-RIGHT: 0px; PADDING-RIGHT: 0px; BORDER-TOP: 0px; PADDING-LEFT: 0px; PADDING-BOTTOM: 0px; MARGIN: 0px; OVERFLOW: visible; BORDER-LEFT: 0px; WIDTH: 0px; PADDING-TOP: 0px; BORDER-BOTTOM: 0px; HEIGHT: 0px; textAlign: left" codeBase=http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=8,0,0,0 alt="" data=data:application/x-oleobject;base64,IGkzJfkDzxGP0ACqAGhvEzwhRE9DVFlQR SBIVE1MIFBVQkxJQyAiLS8vVzNDLy9EVEQgSFRNTCA0LjAgVHJ hbnNpdGlvbmFsLy9FTiI+DQo8SFRNTD48SEVBRD4NCjxNRVRBI Gh0dHAtZXF1aXY9Q29udGVudC1UeXBlIGNvbnRlbnQ9InRleHQ vaHRtbDsgY2hhcnNldD13aW5kb3dzLTEyNTIiPg0KPE1FVEEgY 29udGVudD0iTVNIVE1MIDYuMDAuNjAwMC4xNjQxNCIgbmFtZT1 HRU5FUkFUT1I+PC9IRUFEPg0KPEJPRFk+DQo8UD4mbmJzcDs8L 1A+PC9CT0RZPjwvSFRNTD4NCg== border=0 classid="clsid:D</OBJECT>
Piech's grandfather, Ferdinand Porsche, was behind Hitler's People's Car, eventually to become the VW Beetle. Post-Second World War investigations into links between the Nazi regime and Ferdinand Porsche, his son Ferry, and son-in-law Anton Piech, created an uneasy tension within the family.
The Porsches and the Piechs settled in Austria, hand-building sports cars and creating a distribution network for VW cars. After his schooling in Switzerland, Ferdinand Piech joined Porsche as an engineer, and in the 1960s designed the company's ground-breaking 917 racing car.
Aggressive, brooding, but above all strong-willed, Piech rose to become an influential figure in Europe's motor industry, and few people were surprised when in 1993 he became chief executive of Volkswagen. But his management style was not to everyone's taste. German newspapers called him "Lord of the Manor". A General Motors executive called him "quasi-psychotic".
In Germany, where an estimated one in seven jobs is dependent upon the motor industry, Piech wielded immense political and industrial clout. Strategic links between Porsche and Volkswagen were broadened and deepened. For example, VW produces the Porsche Cayenne. And Porsche distributes VW cars in Eastern Europe.
But Piech is not infallible. He failed to tackle over-manning at Volkswagen's factories, and his fascination with highly engineered cars created some expensive mistakes, notably VW's Phaeton luxury saloon.
Piech stepped aside in 2002, to be replaced by former BMW chief Bernd Pischetsrieder. Two years later VW was engulfed in allegations that executives (not Piech) and trade union leaders had been involved in bribery and corruption. There was plenty of meat for the tabloids, with claims that Volkswagen even footed the bill for Viagra handed out at meetings with prostitutes.
Last month, Piech was a witness in a German court case and faced questions about a VW slush fund. He denied any knowledge. The matter, at least as far as Piech's alleged involvement is concerned, is closed.
It is not the first time that Piech's position has been considered vulnerable, but this force of nature continues to prosper and get his way.
In September 2005, when news first broke that Porsche was stake-building in Volkswagen, an internal VW report into corporate governance conflicts recommended Piech resign. He fought, and won, seeing off attacks from Christian Wulff, leader of the State of Lower Saxony, which owns 18 per cent of Volkswagen, and Pischetsrieder, who eventually fell on his sword. Within 12 months Porsche had built a stake of 27.4 per cent in Volkswagen.
One problem: Germany's so-called "VW Law" limited any shareholder to only 20 per cent of the voting rights, regardless of the size of the stake. Last year, the European Union's Supreme Court ruled the law was anti-competitive. Germany has resisted demands to scrap it, but Porsche's decision to take its Volkswagen stake to 51 per cent signifies that the sports car maker anticipates Berlin will have to capitulate.
Tim Urquhart, analyst at Global Insight, believes the next big battle facing Porsche and Piech will be with the VW unions. Bernd Osterloh, head of VW's works council, described Porsche's takeover as "hostile". Urquhart said: "Osterloh is fighting to retain the workers' veto on strategic corporate decisions, something that Porsche's chief executive Wendelin Wiedeking has already said should be abolished."
Urquhart also thinks there could be opposition to Porsche from VW's chief executive Martin Winterkorn, for years an ally of Piech and who was recruited from Audi when Pischestrieder was deposed. A restructuring of VW looks inevitable, and there will be question marks over the survival of the Audi R8, a competitor to Porsche's high-performance cars. Some at Porsche - though not, perhaps, Piech - may want to sell Lamborghini.
Piech is hoping that the end result will be a company capable of taking on the might of Toyota, whose growth over the last decade has been the biggest competitive challenge facing car companies in Europe and America. A combined Porsche-VW will be the largest automotive company in the world. In Germany, where carmakers are an industrial virility symbol, that could be important for the economic mood. But for Piech it will be the realisation of a dream.
This is from the Financial Times so it should be reliable.
Porsche boss realises dream with VW takeover
Last Updated: 12:03am GMT 09/03/2008
<!--NO VIEW-->
Russell Hotten on why European motoring industry's godfather is engineering creation of world's largest auto maker
Ferdinand Piech, the godfather of Europe's motor industry, says he has learned a lot from reading books about family dynasties. The first generation creates the business, the second consolidates it, and the third destroys it. Piech - a member of the third generation Porsche clan - is about to prove if this is true.
News from the transport and auto world (http://www.telegraph.co.uk/money/main.jhtml?menuId=242&menuItemId=10288&view=HEADLINESUMMARY2&grid=F7&targetRule=14)
<TABLE cellSpacing=0 cellPadding=0 width=358 align=right border=0 hspace="0"><TBODY><TR><TD width=8 rowSpan=2></TD><TD width=350><CENTER>http://www.telegraph.co.uk/money/graphics/2008/03/09/cnpiech09.jpg</CENTER></TD></TR><TR><TD class=caption><CENTER>Gearing up: Porsche has built a 51 per cent stake in VW
</CENTER>
</TD></TR></TBODY></TABLE>Last week family-owned Porsche, the iconic maker of sports cars, took control of Volkswagen, Europe's largest automotive manufacturer. Piech has historic, emotional and financial ties to both companies. Bringing them together was a dream; the 70-year-old's crowning glory. "Ferdinand The Second: King of Cars" said a headline in the normally sober German business daily Handelsblatt.
On Monday, just as Porsche was taking its Volkswagen stake above 50 per cent, VW was itself putting the finishing touches to a takeover of Sweden's Scania. The result is a global industrial giant that includes two producers of heavy trucks, and carmakers Audi, Bentley, Lamborghini, Seat and Skoda. The combined group now has 11 marques - one less than the number of Piech children.
But despite 12 offspring, by four women, Piech-watchers say that car companies are his real family. And there are no other brands closer to his heart than Porsche and Volkswagen. Piech chairs Volkswagen's board, and until last week sat on Porsche's supervisory council, a position now occupied by his brother Hans Michel. Bringing the companies together has been a controversial and Herculean task. But Piech's struggle is not over. Not all investors and insiders at the companies are happy.
Their worry is that this takeover by Porsche has been driven not by financial and industrial logic, but by passion. The billionaire Piech, a brilliant engineer in his day, has petrol in his veins and a burning desire to put the Porsche family name up there with Ford.
<OBJECT class=inlineimg id=ebBannerFlash_0_3004963060096218 title="Big Grin" style="BORDER-RIGHT: 0px; PADDING-RIGHT: 0px; BORDER-TOP: 0px; PADDING-LEFT: 0px; PADDING-BOTTOM: 0px; MARGIN: 0px; OVERFLOW: visible; BORDER-LEFT: 0px; WIDTH: 0px; PADDING-TOP: 0px; BORDER-BOTTOM: 0px; HEIGHT: 0px; textAlign: left" codeBase=http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=8,0,0,0 alt="" data=data:application/x-oleobject;base64,IGkzJfkDzxGP0ACqAGhvEzwhRE9DVFlQR SBIVE1MIFBVQkxJQyAiLS8vVzNDLy9EVEQgSFRNTCA0LjAgVHJ hbnNpdGlvbmFsLy9FTiI+DQo8SFRNTD48SEVBRD4NCjxNRVRBI Gh0dHAtZXF1aXY9Q29udGVudC1UeXBlIGNvbnRlbnQ9InRleHQ vaHRtbDsgY2hhcnNldD13aW5kb3dzLTEyNTIiPg0KPE1FVEEgY 29udGVudD0iTVNIVE1MIDYuMDAuNjAwMC4xNjQxNCIgbmFtZT1 HRU5FUkFUT1I+PC9IRUFEPg0KPEJPRFk+DQo8UD4mbmJzcDs8L 1A+PC9CT0RZPjwvSFRNTD4NCg== border=0 classid="clsid:D</OBJECT>
Piech's grandfather, Ferdinand Porsche, was behind Hitler's People's Car, eventually to become the VW Beetle. Post-Second World War investigations into links between the Nazi regime and Ferdinand Porsche, his son Ferry, and son-in-law Anton Piech, created an uneasy tension within the family.
The Porsches and the Piechs settled in Austria, hand-building sports cars and creating a distribution network for VW cars. After his schooling in Switzerland, Ferdinand Piech joined Porsche as an engineer, and in the 1960s designed the company's ground-breaking 917 racing car.
Aggressive, brooding, but above all strong-willed, Piech rose to become an influential figure in Europe's motor industry, and few people were surprised when in 1993 he became chief executive of Volkswagen. But his management style was not to everyone's taste. German newspapers called him "Lord of the Manor". A General Motors executive called him "quasi-psychotic".
In Germany, where an estimated one in seven jobs is dependent upon the motor industry, Piech wielded immense political and industrial clout. Strategic links between Porsche and Volkswagen were broadened and deepened. For example, VW produces the Porsche Cayenne. And Porsche distributes VW cars in Eastern Europe.
But Piech is not infallible. He failed to tackle over-manning at Volkswagen's factories, and his fascination with highly engineered cars created some expensive mistakes, notably VW's Phaeton luxury saloon.
Piech stepped aside in 2002, to be replaced by former BMW chief Bernd Pischetsrieder. Two years later VW was engulfed in allegations that executives (not Piech) and trade union leaders had been involved in bribery and corruption. There was plenty of meat for the tabloids, with claims that Volkswagen even footed the bill for Viagra handed out at meetings with prostitutes.
Last month, Piech was a witness in a German court case and faced questions about a VW slush fund. He denied any knowledge. The matter, at least as far as Piech's alleged involvement is concerned, is closed.
It is not the first time that Piech's position has been considered vulnerable, but this force of nature continues to prosper and get his way.
In September 2005, when news first broke that Porsche was stake-building in Volkswagen, an internal VW report into corporate governance conflicts recommended Piech resign. He fought, and won, seeing off attacks from Christian Wulff, leader of the State of Lower Saxony, which owns 18 per cent of Volkswagen, and Pischetsrieder, who eventually fell on his sword. Within 12 months Porsche had built a stake of 27.4 per cent in Volkswagen.
One problem: Germany's so-called "VW Law" limited any shareholder to only 20 per cent of the voting rights, regardless of the size of the stake. Last year, the European Union's Supreme Court ruled the law was anti-competitive. Germany has resisted demands to scrap it, but Porsche's decision to take its Volkswagen stake to 51 per cent signifies that the sports car maker anticipates Berlin will have to capitulate.
Tim Urquhart, analyst at Global Insight, believes the next big battle facing Porsche and Piech will be with the VW unions. Bernd Osterloh, head of VW's works council, described Porsche's takeover as "hostile". Urquhart said: "Osterloh is fighting to retain the workers' veto on strategic corporate decisions, something that Porsche's chief executive Wendelin Wiedeking has already said should be abolished."
Urquhart also thinks there could be opposition to Porsche from VW's chief executive Martin Winterkorn, for years an ally of Piech and who was recruited from Audi when Pischestrieder was deposed. A restructuring of VW looks inevitable, and there will be question marks over the survival of the Audi R8, a competitor to Porsche's high-performance cars. Some at Porsche - though not, perhaps, Piech - may want to sell Lamborghini.
Piech is hoping that the end result will be a company capable of taking on the might of Toyota, whose growth over the last decade has been the biggest competitive challenge facing car companies in Europe and America. A combined Porsche-VW will be the largest automotive company in the world. In Germany, where carmakers are an industrial virility symbol, that could be important for the economic mood. But for Piech it will be the realisation of a dream.
This is from the Financial Times so it should be reliable.