• Germany's news in English

Volkswagen takes the wheel at Porsche

AFP · 23 Jul 2009, 19:39

Published: 23 Jul 2009 19:39 GMT+02:00

Facebook Twitter Google+ reddit

The programmed integration, with financial support from the Gulf emirate of Qatar, provoked the departure of Porsche chief Wendelin Wiedeking, said to be Germany's highest paid boss.

Porsche's supervisory board, rocked by an epic boardroom battle that fuelled a caustic family feud, reached agreement following all-night talks on a plan to merge Porsche and VW that seemed to leave the latter in the driver's seat. Porsche currently owns 51 percent of the much bigger VW.

"We have opened the way ... to the creation of an integrated group," VW chief executive Martin Winterkorn said following a meeting of his group's supervisory board in the southwestern German city of Stuttgart where Porsche is based.

Winterkorn is tipped to lead what could be the second biggest global auto maker behind Toyota of Japan, given the undetermined extent of US giant General Motors' collapse.

A project approved by both Porsche and VW would see Porsche completely integrated into VW, but reinforce the former's finances to guarantee it a minimum of independence. In practice, the VW group is to progressively buy Porsche's auto-production unit, making it VW's 10th brand alongside divisions like Audi, Seat, Skoda, Scania or Lamborghini.

The holding companies Porsche SE and Volkswagen AG would also merge. Within that context, Qatar would acquire around 17 percent of VW, Winterkorn said. But Qatar could also invest directly in Porsche, a move approved by that company's supervisory board at the same time it decided on a capital increase of at least €5 billion ($7 billion).

That should allow Porsche to "negotiate (a merger) with VW on equal terms," supervisory board president Wolfgang Porsche told around 5,000 of the company's workers in a trembling voice.

The plan, final details of which are to be presented on August 13 following a meeting of the VW board, seals the failure of a gamble by Wiedeking and Porsche's management to take over VW. That strategy, one of the most spectacular corporate operations in German

history, almost succeeded.

Stuttgart-based Porsche tried to acquire 75 percent of the shares in VW but had to abandon the attempt in May against a background of slumping auto markets and tighter credit conditions.

Wiedeking and Porsche finance director Holger Härter resigned on Thursday and were to receive severance pay of €50 million and €12.5 million respectively.

Story continues below…

Wiedeking, who is believed to have earned around €80 million last year, said he would give half of his payoff to charities, including €1.5 million to "journalists in need." He had come under sustained attack, in part through press reports that did not identify their sources, amid a furious months-long clan war between the Porsche and Piech families, which own the Porsche holding company.

Wiedeking was the principle target of Ferdinand Piech, grandson of Porsche founder Ferdinand Porsche, who invented the VW Beetle.

Piech is also president of the VW supervisory board and appeared to be the main victor in a struggle for control over both carmakers. Nicknamed "the patriarch" by German media, Piech is now well placed to pursue his dream of creating an auto group able to overtake Toyota and become the biggest in the world.

That target was confirmed once more on Thursday by Christian Wulff, regional premier of the German state of Lower Saxony, where VW is based and which owns 20 percent of the auto manufacturer.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Obama to visit Berlin in last presidential trip to Germany
President Barack Obama and Chancellor Angela Merkel during a Berlin trip in 2013. Photo: DPA.

The White House announced on Tuesday that US President Barack Obama will be paying one last unexpected visit to the German capital - his last before he leaves office.

Hostility towards minorities 'widespread in Bavaria'
A village in southern Bavaria. Photo: DPA.

Hate and hostility towards groups deemed to be different are not just sentiments felt by fringe extremists, a new report on Bavaria shows.

Hated RB Leipzig emerge as shock challengers to Bayern
RB Leipzig. Photo: DPA

RB Leipzig's remarkable unbeaten start to the Bundesliga season has seen them suddenly emerge at the head of the pack chasing reigning champions and league leaders Bayern Munich.

Munich taxi driver in hospital after attack by British tourists
Photo: DPA

A taxi driver had to be hospitalized in Munich on Monday evening after three British tourists refused to pay their fare and then attacked him.

German police carry out nationwide anti-terror raids
Police outside a building in Jena during raids on Tuesday. Photo: DPA

Police forces in five German states carried out raids on Tuesday morning with the aim of tackling the financing of terror groups, police in Thuringia have reported.

The Local List
10 ways German completely messes up your English
Photo: DPA

So you've mastered German, but now it's time to learn English all over again.

Iconic German church being eroded away by human urine
Ulm Minster towering over the rest Ulm surrounding the Danube. Photo: Pixabay

It will now cost you €100 to spend a penny. That’s if you get caught choosing to pee against the world-famous Ulm Minster.

German small arms ammo exports grow ten-fold
Photo: DPA

The government has come in for criticism after new figures revealed that Germany exported ten times the quantity of small arms ammunition in the first half of 2016 as in the same period last year.

14-year-old stabs 'creepy clown' in prank gone wrong
File photo: DPA.

A 16-year-old in Berlin decided he wanted to scare some friends, but his plot backfired in a violent way.

Four Ku Klux Klan groups active in Germany, says govt
An American member of the KKK at a gathering in Georgia. Photo: EPA.

The German government estimates that there are four Ku Klux Klan (KKK) groups currently active in the country, according to a report by the Süddeutsche Zeitung (SZ) on Tuesday.

Germany's 10 most weird and wonderful landmarks
Sponsored Article
Last chance to vote absentee in the US elections
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd