"VW to buy Rest of Porsche AG" - Chapter II

[John Z Goriup]

In a follow-up article in today's (Friday, July 6, '12 ) Wall Street Journal, titled "PORSCHE TO PICK UP SPEED UNDER VW" the same reporter, one Vanessa Fuhrmans, delves further into some of the operational details of Volkswagen AG taking full control of Porsche Automobil Holding SE's auto-making business for a price of approx. US $ 5.59 Billion.The agreement is set to become effective on August 1, 2012.

The article contains interesting statements and conclusions, some of which I will quote here, but I don't dare post the entire article lest I incur Ruppert's wrath, therefore I urge those interested to obtain a copy of today's WSJ or read about it on the net, if available:

......." with Volkswagen heft behind it, Porsche is expected to accelerate its transformation from niche sports-car maker into a luxury powerhouse "

......." while closer access to VW's immense scale will allow the combined companies to save 700 million Euros annually, it will also put Porsche's quick footedness and cachet at risk"

......." Porsche to be more confined to sharing components and technologies within the VW Group. Already it has had to dissolve its contract with Magna International to build Boxsters. Instead they will soon be built at Volkswagen Karman plant in Osnabrück, Germany alongside VW Gulf Cabriolets"

......." getting stuck in VWs bureaucracy is one risk for Porsche "

......." You have only one person who is basically deciding everything within Volkswagen. That is always a big risk for Porsche. "

Without editorializing on my part re the last point, but looking back at the birth of Porsche in Gmünd, isn't that exactly how it was when it all started in 1948 ?

[Nine17]

Thanks for the update.

VAG is looking East -- to the former Warsaw Pact countries and to China. They have incredible leverage there -- Audi is the preferred ride of the Cadres in China; the VW Phaeton was clearly aimed at the ZiL. The American market means little to them in terms of their luxury brands. America is broke and needs cheap cars, but today Russia and China have thousands of rapacious oligarchs with no brand consciousness before 1995. Our wonderful little cuckoo-clocks are relics of the past.

It's interesting to read the speculation about the politics and how Weideking got snookered. They seem to forget that VAG chariman Ferdinand "Buerly" Piech was inside the Schuttgutt all along -- and knew what was coming from other family members. He had doubtless clued-in the Lower Saxony government and the IG Metall union about what was brewing and was ready to pivot at the right moment. Because he protected the government's and union's interests, Piech had state protection. The proof is that the German Federal tax office is waiving $1.5 Billion Euro in tax liability on the current takeover of Porsche's manufacturing operations by VAG.

Just my 2 cents...

-- David