Porsche clan to decide sale question on Wednesday

The Porsche clan will decide on Wednesday whether to sell the sports car manufacturer to Volkswagen for €11 billion, according to weekly Focus magazine.

Porsche clan to decide sale question on Wednesday
Photo: DPA

Wolfgang Porsche, Ferdinand Piech and the other three most important owner representatives will meet then to discuss how to solve the financial problems of the firm after failing to reach an agreement last Wednesday, the magazine says.

Piech, who sits on the VW board as well as being co-owner of Porsche, argued last week for Porsche to be sold to VW, and presented a detailed plan to the others last week.

This set the price at €11 billion, and included the immediate dismissal of Porsche boss Wendelin Wiedeking the magazine says, and would free the family of all debts in one hit.

The clan has been struggling since they bought just over half of VW.

But Wiedeking is arguing for the owners themselves to raise the money to save Porsche from being absorbed by VW.

Porsche workers’ council head Uwe Hück has heavily criticised the owners, saying that the firm has produced €15 billion profit over the last decade and those who have benefited from that should put money into the company rather than plan to sell it off to VW.

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Five things to know about Germany’s ‘dieselgate’ scandal

The emissions cheating scandal, which on Tuesday saw three Volkswagen chiefs charged and its rival Daimler heavily fined, has had major repercussions for the car industry since it broke four years ago.

Five things to know about Germany's 'dieselgate' scandal

Exposed in 2015

On September 18th, 2015, the US Environmental Protection Agency (EPA) reported that VW had installed illegal “defeat devices” in hundreds of thousands of engines in the United States since 2009.

The software — used in the Volkswagen, Porsche, Audi, Seat and Skoda brands — helped the cars meet exhaust pollution standards when monitored in tests even though their emissions actually exceeded the limits.

It meant that some cars spewed out up to 40 times more harmful nitrogen oxide — linked to respiratory and cardiovascular diseases — than legally allowed.

The company later admitted that 11 million diesel vehicles worldwide, including 8.5 million in Europe and 600,000 in the United States, had been fitted with the software, most of them in the VW brand.

SEE ALSO: 'Dieselgate': German prosecutors charge former Audi boss with fraud

Legal fall-out

VW chief executive Martin Winterkorn, who stepped down five days after the scandal broke, was in April 2019 charged with serious fraud, unfair competition and breach of trust.

Eight former and current executives and an Audi official have been charged in the United States, including Winterkorn.

Audi chief executive Rupert Stadler was charged in July 2019 with fraud, falsifying certifications and illegal advertising in connection with the “defeat devices”.

Former Audi head Rupert Stadler at a press briefing in 2018.

VW's guilty plea to a US criminal case in March 2017 settled its legal entanglements there, bringing to around $22 billion the amount it agreed to pay in fines and compensation to owners and dealers and for environmental clean-up.

The group still faces investigations and lawsuits around the world, in Europe the countries include Britain, France, Germany, Italy and Poland.

Costs for VW

The scandal has so far cost VW around 30 billion in fines, compensation and buybacks, mainly in the United States.

The company announced a net loss of nearly €1.6 billion in 2015, its first in 20 years, after setting aside billions to cover the costs of the dieselgate.

In June 2018 it agreed to pay a 1 billion fine in Germany, admitting its responsibility for the diesel crisis.

Audi agreed in October 2018 to pay an 800 million fine and Porsche was in May 2019 ordered to pay a fine of 535 million.

Other carmakers?

Tests in the wake of the scandal found that diesel engines by other carmakers were also more polluting on the road than during testing.

But none have so far admitted to mass cheating.

However Mercedes-Benz maker Daimler was in June 2018 ordered to recall 774,000 diesel vehicles across Europe because they too were fitted with illegal “defeat devices”.

Fiat Chrysler agreed in January 2019 to a pay $515 million to settle claims it installed the software.

And in February 2019 German prosecutors fined high-end carmaker BMW 8.5 million euros over diesel cars with higher harmful emissions than allowed, though they found no criminal wrong-doing.

Opel is also being investigated.

A worker holds up a Volkswagen badge at the VW plant in Wolfsburg. Image: DPA

Market reaction

A study released in March 2017 said that pollution from 2.6 million rigged VW cars sold in Germany would likely cause 1,200 premature deaths in Europe because of the excess emissions.

In Germany more than 410,000 customers are demanding compensation, as are

More generally, European drivers appear to have largely shrugged off the controversy while VW sales have fallen in the United States.

VW said in July 2019 it expects “slightly higher” unit sales for the year than in 2018.

SEE ALSO: VW sees steady profits in 2018 results