From The London Times Today at 00:45
"Volkswagen, Europe’s largest car manufacturer, is set to fold Porsche into its expanding empire after toppling Wendelin Wiedeking, Germany’s highest-paid executive, from the helm of the sports car company yesterday.
Mr Wiedeking, who leaves with a €50 million (£43 million) payoff, told Porsche workers in an emotional farewell that he had fought to the last for the company’s independence. Uwe Hueck, head of Porsche’s works council, said: “They treated you as if it were a public execution.” The crowd roared its approval when Mr Hueck promised to launch a “galactic battle” against VW if the company tried to cut jobs.
The battle metaphors were appropriate: the ousting of Mr Wiedeking and the inevitable takeover by VW spells the end of a fierce power struggle not only between giant and tiny carmakers, but also between feuding strands of the Porsche family.
Mr Wiedeking built a 51 per cent holding in VW last year and had obtained options for another 20 per cent of stock. The aim was to secure such a thumping majority that it could not only transform what he saw as the sleepy VW management ethic, but also gain access to its cash reserves.
However, Porsche overreached itself and became saddled with €9 billion of debt. VW, under Ferdinand Piech, its supervisory board chairman,moved swiftly to mount a reverse bid.
Mr Piech, 72, is the grandson of Ferdinand Porsche, who designed the VW Beetle and established the sports car company that bears his name. For Mr Piech, the bid answered the question of what mattered most: the continued independence of his grandfather’s once highly profitable, but now debt-heavy company with its racy 911 Carreras, or the sacrifice of some entrepreneurial freedom in return for the financial security of belonging to the VW group.
One industry analyst said: “Piech had to decide three things: what was best for Porsche’s survival — after all he also sits on the Porsche board, as a family member, he’s not just a VW man; what was best for his grandfather’s historical legacy; and what was best for his own legacy.” In the end, it seems that Porsche will become one of VW’s ten marques, alongside the likes of Audi and Bugatti, with some autonomy. Most experts see that as a clear victory for Mr Piech."