► VW chairman Ferdinand Piech resigns
► Surprise fall-out from Piech vs Winterkorn fight
► It’s the end of an era at Volkswagen
There’s a surprise loser in the management spat in the corridors of power at Wolfsburg: VW scion Ferdinand Piech resigned at the weekend after his spat with chief executive Martin Winterkorn.
His departure leaves a void at the top of Volkswagen akin to that at Apple when Steve Jobs died, according to the Financial Times. Piech was CEO at VW from 1993, and then stepped up to become chairman of the supervisory board in 2002.
How Piech lost his job
Piech and Winterkorn have been engaged in a vicious power struggle after Piech criticised his CEO in an interview in German newspaper Der Spiegel earlier in April 2015. Some reports are claiming that Piech was involved in a plot to oust Winterkorn in favour of Porsche chief Matthias Muller – but the board reportedly baulked at the news, forcing Piech’s resignation.
In an emergency meeting of the executive committee of Volkswagen at the weekend, the board decreed ‘the mutual trust necessary for successful cooperation no longer exists.’ Piech resigned with immediate effect from his position as chairman of the supervisory board after an ultimatum from the executive committee.
Piech fell on his sword rather than risk the ignominy of being voted out by his fellow board members. And his wife, Ursula Piech, a former kindergarten teacher, has also resigned from her supervisory board mandates with immediate effect. Her appointment to the board was one of the moves by Piech that annoyed investors.
The fall-out from the Piech vs Winterkorn power struggle
It’s the end of an era at Volkswagen; Piech has ruled the roost for more than two decades at Europe’s biggest car maker – and established a reputation as a ruthless chairman, whose opinion could make or break cars – and careers. Rising stars such as Bernd Pischetsrieder, Franz-Josef Paefgen, Wolfgang Bernhard and Wendelin Wiedeking all saw their job prospects poleaxed at the whim of the master puppeteer.
Piech’s CV is littered with an extraordinary number of seminal car programmes and acquisitions, assembling the 12-brand global behemoth the VW group has become today: he worked on the Audi ur-Quattro, the VW Golf Mk4’s giant leap forward in quality, presciently ushered in the modern art of platform sharing and, famously, the 254mph Bugatti Veyron supercar statement.
Although at 78 surely entering the twilight of his career, Piech was still a daunting figure at Volkswagen wielding a huge amount of control. The grandson of Beetle creator Ferdinand Porsche, his family history is closely entwined with the VW empire; the Piech and Porsche dynasties control 51% of voting rights through the Porsche SE holding company.
The Piechs themselves may sell their own stake in Volkswagen, put at 13.2%. At current high stock prices, that’s worth a handy €1.7 billion. Safe to say their retirement won’t be an austere one…
What next for Volkswagen?
The big question in Wolfsburg at the start of this week is: who will fill Piech’s sizable shoes? In the short term, deputy chairman Berthold Huber, a 65-year-old experienced trade unionist, will chair the supervisory board and the AGM on 5 May 2015. Winterkorn, 67, had been tipped to succeed Piech, but the company may use the new regime as an opportunity to seek another leader.
VW is keen to appoint a full-time chairman of the supervisory board quickly, filling the vacuum at the top of one of the world’s biggest manufacturers. Whoever takes over will have their hands full, as VW continues its quest to cut €5 billion a year from its cost base by 2017 to boost its underperforming profit margins.
And the successor will also have to address the issues that reportedly led to Piech’s attack on Winterkorn in the first place: namely, the slow progress VW has made in the US, weak profitability and the lack of a budget car to compete in some of the world’s emerging markets.
Will you miss Piech’s 22-year leadership at Volkswagen? Sound off in the comments below. And download the December 2012 issue of CAR magazine’s iPad edition to read our full profile of the mercurial former VW boss.