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Ex-Volkswagen chief looks to sell $1.2-bn stake

This could weaken family's control of Volkswagen; create uncertainty about the company's direction

Jack Ewing | NYT 

VW, volkswagen, Martin Winterkorn, Winterkorn
Volkswagen’s former CEOs Martin Winterkorn (right) and Ferdinand Piech, chairman of the supervisory board. Photo: Reuters

Ferdinand Piëch, the scion of an automaking dynasty who dominated for two decades, is trying to sell his substantial indirect in the company to members of his extended family, which could create uncertainty in the aftermath of the carmaker’s diesel deception. 

Piëch, a former chief executive and supervisory board chairman at Volkswagen, was often a source of discord among the quarrelsome Piëch and Porsche clans, which own more than 50 per cent of Volkswagen’s voting shares. His exit might make it easier for them to push through changes needed for to recover from an emissions deception that weighs heavily on the company.

The tight control, through Porsche Automobil Holding, has led to criticism that the family has been too slow to make the changes in management and company culture that are needed to move beyond the Most of the rest of Volkswagen’s shares are owned by the German state of Lower Saxony and the sovereign wealth fund of Qatar, which tend to side with the family.

But implicit in the disclosure on Friday was that Mr. Piëch could sell his roughly 15 in the family holding company, valued at €1.1 billion ($1.2 billion), to an outsider if he could not agree on terms with his relatives. That could weaken the family’s control of and create uncertainty about the company’s direction. “I expect that the family will not be able to raise the purchase price and that outside investors — for example from China — would come in,” Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen, said in an email. “The Chinese would not pass up such a chance.”

Wolfgang Porsche, a spokesman for Porsche family members, has told the German news media that the relatives would be willing to buy the  

And even if they were unable to, he said in comments confirmed Friday by a spokesman for Porsche Automobil Holding, the family would not have a problem with a new outside shareholder.

Word that Mr. Piëch may sell his comes after a tumultuous week for that showed how much the emissions continues to damage the company’s reputation.

On Wednesday, German investigators searched offices of the Audi unit and of the law firm that has been conducting an internal to determine who is responsible for the Jones Day, the law firm, was hired by the supervisory board, which is dominated by members of the Porsche and Piëch families or their allies.

During his long career at Volkswagen, Piëch, 79, is credited with turning the Audi division into a luxury brand and rescuing from near bankruptcy in the early 1990s.

A grandson of Ferdinand Porsche, the automotive pioneer who designed the Beetle, Mr. Piëch was himself a formidable engineer and an iron-willed manager. After becoming chief executive of in 2003, he improved the quality and design of vehicles and made the company the largest carmaker in Europe by far.

But he was also often criticized for his authoritarian leadership style and blamed for creating the win-at-all-costs company culture that fostered the emissions cheating.

Piëch became the chairman of Volkswagen’s supervisory board in 2002. He was forced out in 2015, only a few months before American regulators accused the company of manipulating engine software to conceal excess emissions by diesel vehicles.

Since then, he has kept a low public profile. And despite remaining a major shareholder, he has had no discernible influence over management.


©2017 The New York Times News Service

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Ex-Volkswagen chief looks to sell $1.2-bn stake

This could weaken family's control of Volkswagen; create uncertainty about the company's direction

This could weaken family's control of Volkswagen; create uncertainty about the company's direction
Ferdinand Piëch, the scion of an automaking dynasty who dominated for two decades, is trying to sell his substantial indirect in the company to members of his extended family, which could create uncertainty in the aftermath of the carmaker’s diesel deception. 

Piëch, a former chief executive and supervisory board chairman at Volkswagen, was often a source of discord among the quarrelsome Piëch and Porsche clans, which own more than 50 per cent of Volkswagen’s voting shares. His exit might make it easier for them to push through changes needed for to recover from an emissions deception that weighs heavily on the company.

The tight control, through Porsche Automobil Holding, has led to criticism that the family has been too slow to make the changes in management and company culture that are needed to move beyond the Most of the rest of Volkswagen’s shares are owned by the German state of Lower Saxony and the sovereign wealth fund of Qatar, which tend to side with the family.

But implicit in the disclosure on Friday was that Mr. Piëch could sell his roughly 15 in the family holding company, valued at €1.1 billion ($1.2 billion), to an outsider if he could not agree on terms with his relatives. That could weaken the family’s control of and create uncertainty about the company’s direction. “I expect that the family will not be able to raise the purchase price and that outside investors — for example from China — would come in,” Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen, said in an email. “The Chinese would not pass up such a chance.”

Wolfgang Porsche, a spokesman for Porsche family members, has told the German news media that the relatives would be willing to buy the  

And even if they were unable to, he said in comments confirmed Friday by a spokesman for Porsche Automobil Holding, the family would not have a problem with a new outside shareholder.

Word that Mr. Piëch may sell his comes after a tumultuous week for that showed how much the emissions continues to damage the company’s reputation.

On Wednesday, German investigators searched offices of the Audi unit and of the law firm that has been conducting an internal to determine who is responsible for the Jones Day, the law firm, was hired by the supervisory board, which is dominated by members of the Porsche and Piëch families or their allies.

During his long career at Volkswagen, Piëch, 79, is credited with turning the Audi division into a luxury brand and rescuing from near bankruptcy in the early 1990s.

A grandson of Ferdinand Porsche, the automotive pioneer who designed the Beetle, Mr. Piëch was himself a formidable engineer and an iron-willed manager. After becoming chief executive of in 2003, he improved the quality and design of vehicles and made the company the largest carmaker in Europe by far.

But he was also often criticized for his authoritarian leadership style and blamed for creating the win-at-all-costs company culture that fostered the emissions cheating.

Piëch became the chairman of Volkswagen’s supervisory board in 2002. He was forced out in 2015, only a few months before American regulators accused the company of manipulating engine software to conceal excess emissions by diesel vehicles.

Since then, he has kept a low public profile. And despite remaining a major shareholder, he has had no discernible influence over management.


©2017 The New York Times News Service

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Business Standard
177 22

Ex-Volkswagen chief looks to sell $1.2-bn stake

This could weaken family's control of Volkswagen; create uncertainty about the company's direction

Ferdinand Piëch, the scion of an automaking dynasty who dominated for two decades, is trying to sell his substantial indirect in the company to members of his extended family, which could create uncertainty in the aftermath of the carmaker’s diesel deception. 

Piëch, a former chief executive and supervisory board chairman at Volkswagen, was often a source of discord among the quarrelsome Piëch and Porsche clans, which own more than 50 per cent of Volkswagen’s voting shares. His exit might make it easier for them to push through changes needed for to recover from an emissions deception that weighs heavily on the company.

The tight control, through Porsche Automobil Holding, has led to criticism that the family has been too slow to make the changes in management and company culture that are needed to move beyond the Most of the rest of Volkswagen’s shares are owned by the German state of Lower Saxony and the sovereign wealth fund of Qatar, which tend to side with the family.

But implicit in the disclosure on Friday was that Mr. Piëch could sell his roughly 15 in the family holding company, valued at €1.1 billion ($1.2 billion), to an outsider if he could not agree on terms with his relatives. That could weaken the family’s control of and create uncertainty about the company’s direction. “I expect that the family will not be able to raise the purchase price and that outside investors — for example from China — would come in,” Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen, said in an email. “The Chinese would not pass up such a chance.”

Wolfgang Porsche, a spokesman for Porsche family members, has told the German news media that the relatives would be willing to buy the  

And even if they were unable to, he said in comments confirmed Friday by a spokesman for Porsche Automobil Holding, the family would not have a problem with a new outside shareholder.

Word that Mr. Piëch may sell his comes after a tumultuous week for that showed how much the emissions continues to damage the company’s reputation.

On Wednesday, German investigators searched offices of the Audi unit and of the law firm that has been conducting an internal to determine who is responsible for the Jones Day, the law firm, was hired by the supervisory board, which is dominated by members of the Porsche and Piëch families or their allies.

During his long career at Volkswagen, Piëch, 79, is credited with turning the Audi division into a luxury brand and rescuing from near bankruptcy in the early 1990s.

A grandson of Ferdinand Porsche, the automotive pioneer who designed the Beetle, Mr. Piëch was himself a formidable engineer and an iron-willed manager. After becoming chief executive of in 2003, he improved the quality and design of vehicles and made the company the largest carmaker in Europe by far.

But he was also often criticized for his authoritarian leadership style and blamed for creating the win-at-all-costs company culture that fostered the emissions cheating.

Piëch became the chairman of Volkswagen’s supervisory board in 2002. He was forced out in 2015, only a few months before American regulators accused the company of manipulating engine software to conceal excess emissions by diesel vehicles.

Since then, he has kept a low public profile. And despite remaining a major shareholder, he has had no discernible influence over management.


©2017 The New York Times News Service

image
Business Standard
177 22