Wiedeking resigns

[Bummler]

The Wall Street Journal

By CHRISTOPH RAUWALD

FRANKFURT -- Porsche Automobil Holding SE Thursday said Chief Executive Wendelin Wiedeking is leaving the German sports-car maker with immediate effect, hours after the company's supervisory board approved his plan for a capital increase of at least €5 billion ($7.1 billion) and unanimously backed talks with Qatar over a capital injection.

Porsche Chief Financial Officer and Wiedeking confidant Holger Haerter also resigned.

"Wiedeking and Haerter have come to the conclusion that the further strategic development of Porsche ... is better off, if they are not on board as acting persons," the Stuttgart-based company said in a statement following an extraordinary board meeting that started Wednesday evening.

The move -- along with the announcement that Porsche will seek to raise funds – is expected to make it easier for Volkswagen and Porsche to merge given that Mr. Wiedeking opposed such a move.

"The measure shall create the foundation of building an integrated car manufacturing group with Porsche SE and Volkswagen AG," a company statement said.

Porsche has been locked in a fierce power struggle with Volkswagen. Its attempt to gain full control over its much larger German peer backfired when credit markets dried up amid the financial crisis.
[Mr. Wiedeking had come under fire from Ferdinand Piech, the powerful labor unions of VW and the German state of Lower Saxony.] Getty Images

Mr. Wiedeking had come under fire from Ferdinand Piech, the powerful labor unions of VW and the German state of Lower Saxony.

Porsche said Mr. Wiedeking accepted a compensation package of €50 million for his contract expiring in 2012. Mr. Haerter will receive €12.5 million as compensation, Porsche said, adding that both executives "waived rights deriving from their current contracts in a substantial amount." Mr. Wiedeking said in a statement that he will donate a substantial amount of money to social projects and charity organizations.

Messrs. Wiedeking and Haerter will "provide advice to both companies as wished by the supervisory board" and will "support their respective successor in their tasks."

The head of production and logistics at Porsche's core sports-car operations, Michael Macht, will replace Mr. Wiedeking as the operation's chief executive.

Thomas Edig, the operation's head of human resources, will become his deputy. Messrs. Macht and Edig have been appointed as executive board members at Porsche's holding company as well, with Mr. Macht being in charge of technology and products and Mr. Edig with responsibility for commercial issues and administration.

Mr. Wiedeking, Germany's highest-paid executive, had come under fire from Volkswagen's influential supervisory board chairman and Porsche co-owner Ferdinand Piech, Volkswagen's powerful labor unions and the German state of Lower Saxony, which can block important decisions at the Wolfsburg-based auto maker through its 20.1% stake.

Speculation about Mr. Wiedeking's departure has swirled since Mr. Piech said May 11 in Italy during one of his rare public appearances that he favored Volkswagen Chief Executive Martin Winterkorn, one of his closest confidants, as head of a combined company.

Mr. Piech advocated an outright sale of Porsche's coveted sports-car operations to Volkswagen, which would make it the 10th brand of Europe's largest auto empire, comprising vehicles ranging from the super-luxury Bugatti Veyron sportscar to Scania AG's heavy trucks.

Mr. Wiedeking boosted the families' wealth by saving Porsche from the brink of bankruptcy in the early 1990s and transforming the closely held firm into the world's most profitable car maker. Porsche reaped huge windfall profits from its holding in Volkswagen after launching its stealth takeover in 2005 by bypassing disclosure rules through a complex set of stock options. Porsche is still Volkswagen's majority shareholder with a stake of almost 51% and controls options to hike its stake by another 20%.

But Porsche's plan to boost its stake to 75% and access Volkswagen's cash reserves went wrong as credit markets tightened and a steep fall in demand ate into the sportscar operation's earnings. Tables turned in the two companies' power struggle when Porsche's net debt ballooned to around €10 billion as it built its holding in Volkswagen and the Wolfsburg-based company in March had to grant its parent a €700 million loan.
—The Associated Press contributed to this article.

[boxster03]

I hear there is a Porsche Mini Van on the drawing board

[gulf908]

I await with interest to see if the members of Porsche's Supervisory Board will respond by also falling on their swords in the near future.
My perception is that Weideking would not have been able to carry out all this risky business without the Board's consent over the past few years.
I can see Piech rubbing his hands with glee over this - has he not wanted Porsche in his domain for a long time ?
Poor old Ferry must be rolling in his grave over the loss of Porsche's independance - after all,was this Porsche / Piech families squabbling the cause of the Palace revolution in 1972 ?
...just my 0.02c worth of observations...

Cheers,..well,maybe not...
Dennis.

[67Porsche911S]

Wiedeking is a brilliant manager no doubt. But his attempt to take over VW without the prior consent of Mr. Piech was a big big mistake.
As they say here: It was like a bunch of ants trying to rape an elephant...

[jonnyw]

Mabey a glimmer of hope or another possibility!

Glimmer of Hope :

VW Buys Porsche realizes the importance of Porsche's core is and should be sports cars. Kills the you know whats. Brings production back down to niche market status. Gives Porsche the Veyron Engine for the new Caymen S! Ha!

Another Possibility : The new 911 is based of the new VW EOS. VW builds a new Jetta platform with a V8 to Share with the new 928. Oh man this could be fun! Porsche gets a Rabbit Turbo, Vanagan Turbo and last but not least makes the 944 again using the new Scricco as the foundation. Ehh that might be kinda cool.

And last but not least VW Stretches the Rabbit Architecture and builds a new entry level Porsche with their TDI and call it the 924!

Haha sorry up way to late with a sick kid at the moment and had to comment on the thread! Back to bed I go!

[Macroni]

Just bought a TDI. Great car.....

If Porsche is to get a new owner, they could have done worst than VW.

Audi's, Lambos, Bentley.... all good company for Porsche to keep.

Wiedeking was just another German car manager w/ a propensity for audacity.

[Milou]

What a sad ending to an extraordinary career, I can't help but feel sorry for him and for Porsche. His contribution to the brand's reputation has been enormous, it shouldn't have ended this way.

[Neil '67 911S]

Here are links to an interesting story about the feud, posted by Chuck House of the 356 Registry site.

Der Spiegel has an excellent 2 part story on the Porsche clan and the Porsche-Piech family feud. It is the best story about the recent events regarding Porsche and VW and their historical context.

Part 1
http://www.spiegel.de/international/...637243,00.html

Part 2
http://www.spiegel.de/international/...637542,00.html

[gruen911]

My take on the story of Wiedeking resigning is like my thought about the Porsche Christophorus magazine. If you've ever had the pleasure of flipping thru a Christo issue of the 50's, 60's or 70's, it is great to read. The articles include pic's of the cars, how the cars were built and tested and raced. They also occasionally included little known facts about production. In comparison, pick up the new Christo mag's and all you see are photos of parties had at various Porsche headquarters with business executives and their bejeweled wives standing around talking about the new Beaujolais Nouveau while the next sport sedan with idiot proof braking and foot warmers is unveiled - that's if you don't mind flipping thru 8 ads of various Swiss watch brands being pitched at you.
Porsche is just like any car company. They need to make money to survive. But they used to be exclusively a sports car company up until the 80's. Now they are not much different than any other car manufacturer trying to continue a story line whose reputation for building high quality no nonsense down and dirty teutonic sports cars manufacturer back in the day has now been muddied by SUV's and family cars, executive power plays, stock options and swaps,etc.. If you look at what the company produces these days, how much different is it from VW or AUDI?
Piech was one of the best things to happen to Porsche back in the 70's. Maybe he will be again. With VW's deep pockets and the Piech and Porsche families all on the same page again, and the respect for the world renowned cars the family created, maybe there is a chance for the company to be reborn into its previous carnation. Maybe the company will even get back into sponsoring racing teams.

[Bummler]

What a sad ending to an extraordinary career, I can't help but feel sorry for him and for Porsche. His contribution to the brand's reputation has been enormous, it shouldn't have ended this way.

I have to agree.

Under Wiedeking's leadership Porsche thrived and regained some of it's status lost under Schutz. No offense to Schutz, it was he who saved the 911 from becoming extinct...

I was baffled when the Cayenne project came to the fore and thought it would be a disaster. Instead it has been a great boon to the cash coffers at Porsche. I don't think the same will be said of the Panamera.