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Ferdinand Piëch, the Porsche family scion who has dominated Volkswagen for more than two decades, will resign as chairman of the automaker’s supervisory board, the company said on Saturday, in what appeared to be a stunning defeat for a manager used to getting his way.
Piëch, a 78-year-old Austrian, recently sought to force out Martin Winterkorn, a onetime protégé, as Volkswagen’s chief executive. But the move backfired after Winterkorn refused to go and other members of the supervisory board rallied behind him.
Volkswagen said in statement on Saturday that “the mutual trust necessary for successful cooperation no longer exists” on the supervisory board. As a result, Piëch will give up his post as chairman, effective immediately. Ursula Piëch, his wife, will also give up her seat on the board, Volkswagen said.
Berthold Huber, a labour leader who is deputy chairman of the supervisory board, will serve as acting chairman until a new chairman is chosen, Volkswagen said. In Germany, the supervisory board oversees the work of the management board, which is in charge of day-to-day operations.
“Ferdinand Piëch has made an enormous contribution to Volkswagen and the entire automobile industry,” Huber said in a statement. “The developments of the last two weeks have, however, led to a loss of trust between the supervisory board chairman and the other members, which in recent days has proven to be impossible to resolve.”
Piëch’s resignation came as a surprise. He had a long history of winning power struggles, and many people assumed he would win this one as well. For example, when Porsche, the sports car maker, tried to take over Volkswagen in 2008, Piëch was eventually able to turn the tables and take over Porsche instead.
Piëch initiated the most recent power struggle when he told the German magazine Der Spiegel this month that he was distancing himself from Winterkorn. The public undermining of a top manager was classic Piëch. In the past, when he criticized a Volkswagen executive publicly, it was a sure sign that the manager’s days were numbered.
This time, Piëch appears to have miscalculated. His unilateral attempt to undercut Winterkorn annoyed the labour representatives on the supervisory board, who hold half the seats, as well as representatives of the state of Lower Saxony, which owns a 20 per cent stake. They lined up behind Winterkorn. Volkswagen is based in Wolfsburg in Lower Saxony.
Stephan Weil, the prime minister of Lower Saxony, said Saturday of Piëch, “It is no exaggeration to say that he is one of the most important people in the history of German business.”
“Nevertheless, it was urgently necessary to end the speculation about persons and to ensure clarity in top management,” Weil said in a statement. “Volkswagen and its many thousand employees must be able to concentrate on business.”
Though demanding, mercurial and often feared, Piëch is credited with rescuing Volkswagen from near bankruptcy after he took over as chief executive in 1993. The grandson of Porsche’s founder, Ferdinand Porsche, Piëch was an engineer both by training and by nature who viewed technical excellence as the key to success in the car industry.
As a top executive at Volkswagen’s Audi division in the 1970s and 1980s, Piëch oversaw the development of all-wheel drive in cars, a feature still associated with Audi. After he was appointed chief executive of the parent company, Piëch ensured that even mass-market cars like the Volkswagen Golf had driving characteristics normally found in more expensive cars.
Under Piëch, who became chairman of the supervisory board in 2002, Volkswagen became much more than a producer of automobiles for the middle class. In Piech’s zeal to cover all segments of the market, the company acquired the Czech automaker Skoda to reach price-conscious buyers, while buying the Bentley, Lamborghini and Porsche brands to appeal to wealthy drivers.
The company also produces trucks under the Scania and MAN names and owns the motorcycle manufacturer Ducati. But the core Volkswagen brand has suffered from poor profitability. It has struggled to expand market share in the US despite investing $1 billion to build a plant in Chattanooga, Tennessee, where it manufactures Passat sedans and other cars.
Piëch has faced criticism for his obsession with making Volkswagen the largest carmaker in the world rather than the most profitable.
©2015 The New York Times News Service
