Ferdinand Piech's Long Arm

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

With a demonstration of his power, board member Piech kicked VW boss Pischetsrieder out. And that at a time when the restructuring of the troubled group is showing its first successes.

By Marcus Gatzke

When children slowly grow up and develop their own views, there are often arguments in the family - but their own offspring are seldom cast out. At Volkswagen it's different: Bernd Pischetsrieder, who was brought to Wolfsburg by the Chairman of the Supervisory Board, Ferdinand Piech, has to give way. And that at the end of the year.

The relationship between the two opponents seemed to have relaxed again recently. In the spring, Piech publicly described a contract extension for the chairman of the board as an “open question” - and thus triggered fierce speculation about Pischetsrieder's future.

VW boss will still get a salary for a long time

The contract of Pischetsrieder, who has been at the top of VW since 2002, was extended anyway - until 2012. This circumstance at least ensures that the former BMW manager is on VW's payroll for the next five years, even if he is no longer for the Automobile company works. Insiders see the extension of the contract as an "early severance negotiation". The order of magnitude is likely to be 15 million euros.

One can speculate about the reasons for the sudden dismissal. After all, Pischetsrieder had agreed on an extension of the working hours with the unions, which had repeatedly criticized him severely in the past few months. The restructuring plan at Volkswagen is slowly taking shape. Sales of the ailing core brand VW also increased significantly. The successes are also reflected in the share price, which has almost doubled in the past twelve months.

Dispute over luxury strategy

The restructuring of Volkswagen became necessary because Pischetsrieder's predecessor Piech had an expensive expansion strategy. In particular, the attempt to advance into the luxury class with its own VW model, the Phaeton, proved to be expensive and unsuccessful. Pischetsrieder's attempts to change strategy were commented on by Piech with the words: "We don't take such abrupt curves." The sale of the Phaeton in the USA was stopped anyway - a joke by the CEO against Piech.

Ultimately, the decisive factor for the surprising departure was apparently the planned alliance with MAN

and Scania. Volkswagen had to dig deep into its pockets for a stake in MAN of around 20 percent. If the three-party alliance in the commercial vehicle business, into which Volkswagen wants to bring the Brazilian truck business, fails, it could become expensive for Volkswagen - and that in the middle of the restructuring of Kearke VW.

Winterkorn confidante of Piech

As the only member of the supervisory board, Lower Saxony's Prime Minister Christian Wulff (CDU) made a statement on Tuesday evening - and thanked Pischetsrieder for his good work. For Wulff, who has always stood behind Pischetsrieder in the past, the development is also a personal defeat. The unions, on the other hand, remained conspicuously covered.

By being kicked out, Piech took his chance to raise a long-time confidante to the head of Volkswagen in Audi boss Martin Winterkorn. In 2007, as Piech has promised, he will no longer run for chairmanship of the Volkswagen Supervisory Board.

His personal influence on VW is significantly less, even if the car group Porsche, which is controlled by Piech's family and on whose supervisory board he sits - is the largest single shareholder in Volkswagen. But maybe Piech will change his mind again - if Winterkorn should become too independent.