Pischetsrieder ousted in anticipation of Porsche takeover?

[nadepalma]

I saw this on an Italian website, that puts out the hypothesis that Ferdinand Piëch has orchestrated some kind of coup behind the scenes on VW's supervisory board that will pave the way for Porsche's anticipated takeover (or at the very least upping their stake) of VW. The shake up has left many folks wondering why Bernd Pischetsrieder was let go and why Audi Chief Martin Winterkorn is his appointed successor (instead of Pischetsrieder's recruit Wolfgang Bernhard).

Consider: Lower Saxony (the German state where VW resides) will eventually have to face the fact that the "VW Law", which prevents a single investor from taking more than 20% of VW's commons stock and prevent it from being taken over from a foreign investor, will eventually lose out in court. It's inevitable that the law will eventually fall since EU competition laws are being violated.

Could this be Piëch's way of protecting the Porsche family legacy and "reuniting" both halfs of the family jewels?

Interesting indeed.

Sources: AutoBlog.it, International Herald Tribune, The Guardian-UK

Originally Posted by International Herald Tribune

Pischetsrieder's latest troubles began a year ago when Porsche began buying shares in Volkswagen. Although Porsche said it wanted to shield VW from an unwelcome foreign takeover, it posed a potential challenge to Pischetsrieder's efforts to streamline the company.

Porsche now owns 21.2 percent of Volkswagen and has signaled its intent to increase the stake to 25.1 percent. There were reports Tuesday that it might buy up to 29.9 percent of Volkswagen shares - the most it can own without being required to make a takeover bid.

Porsche's interests are closely intertwined with those of Piëch. A grandson of the founder, Ferdinand Porsche, Piëch and his family control the company. He was Pischetsrieder's predecessor as chief executive, with strong views as to how Volkswagen should be run.

Originally Posted by Forbes.com

Porsche AG does not rule out increasing its stake in Volkswagen AG to 29.9 pct from its current 21.2 pct level, a spokesman for the sports car manufacturer told the Frankfurter Allgemeine Zeitung.

'We cannot rule out going up to 29.9 pct,' the spokesman said.

Should Porsche cross the 30 pct threshold level, it will be required to make a takeover offer for VW, the newspaper added.

Any thoughts?

[Stéphane Dumas]

speaking of Bernhard, Autoextremist posted this one in this week's "On the Table"

Wolfgang Bernhard. The above news can't make Wolfgang Bernhard, the head of the VW brand, very happy at all. He was brought in by Bernd Pischetsrieder to fix the giant mess Ferdinand Piech had left behind at VW, and Pischetsrieder acted as a buffer between the mercurial Bernhard and the maniacal Piech. Bernhard was also on a clear path to replace Pischetsrieder when he moved on, so all of a sudden everything has changed. With that convenient arrangement out the window, look for Bernhard's old compatriot, Dieter Zetsche, to come calling. Zetsche has an overflowing plateful of problems for Bernhard to attack at both Mercedes-Benz and Chrysler. Could Bernhard be headed back to Chrysler? Not unless it's for the top job. Could Bernhard go back to running Mercedes-Benz, the job he was originally slated to have before the disgraced Juergen Shrempp had him broomed? That's more likely. Zetsche could attack his Chairman's job while having his trusted lieutenant take care of the family jewels. Stay tuned...

[DuSpinnst]

So Porsche wants to buy out VW. I say fine.

[PocoToro]

It's about time Bernd Pischetsreder gets the boot from Volkswagen. He has single handedly made VW a takeover target. Before this he almost made BMW a takeover target. He was the guy in charge of the Rover disaster. No car company in there right mind should have hired him after BMW shoved him out the door.


May the Porsche family finally get there other car back

[nadepalma]

Originally Posted by DuSpinnst

So Porsche wants to buy out VW. I say fine.

Historically, I think that it would create a huge -- and significant -- precedence. I mean, the Porsche family was responsible for the creation of VW and Porsche and have traditionally had ties.

So there is a real possibility of having a "new Porsche" company (Auto Union?) that controls VW, Audi, Lamborghini, Bentley, Skoda, SEAT and Bugatti. It would be incredibly interesting to see what happens and if it pans out. AND, it would be interesting if Porsche will retain all those brands (there is more than a bit of overlap there -- especially as Porsche can arguably compete with Lambo, Bentley, etc as they are expanding their lineup to include sedans, etc).

But in all honesty, Porsche created this scenario when years ago they set up a rule that prevented the Porsche and Piech families (two sides of the same coin) from taking the reins at Porsche and muddying the waters. That left Piech the opportunity to go to VW and climb to the top. And his position retained on the supervisory board has allowed him to basically be an actor behind the scenes.

Knowing that Porsche is basically his fiefdom has given him the opportunity to change policies at a much larger company and he's playing all his cards.

[ChevroletRevived]

It's all VERY interesting. I think it'd be good for Porsche to buy VW so they wouldn't be bought out by another automaker, as the VW Law is against the EU's regulations, as nadepalma pointed out.

[asim]

Originally Posted by DuSpinnst

So Porsche wants to buy out VW. I say fine.

VW isn't in the best situation in the world at this current time. I hope that Porsche can help them out, if they buy them.

[redimpss5]

Not sure why Porsche would need them.

[Kowalski]

Originally Posted by redimpss5

Not sure why Porsche would need them.

Porsche could use the DSG gearbox. The Porsche Cayenne, already share the same underpinnings with the VW Touareg and the Audi Q7. With VAG, Porsche could enter in the luxury car arena, with the help of Audi and Bentley.

The Cayenne probably would get the same 5.0 V10 Turbodiesel from the Touareg or the 5.5 V12 Twinturbodiesel from the Q7. And the next Cayenne probably would be styled by Audi, which is a good thing. Because the Q7 is currently the best looking SUV on sale today IMO.

Imagine Porsche, Bugatti and Lamborghini working together. Ferrari, Aston Martin and Maserati will have some very, very serious competition ahead.

[SimonDavid]

I think they want to split it with Porsche taking Audi and VW being sold on

Sounds like a smart long term move to me - VW is getting eaten by high labour costs and import competition, Audi is a much stronger long term bet.

Also there's pressure at an EU level for the repeal of the WW2-era Volkswagen law that prevents VW being overtaken

I wonder if Toyota is sniffing around?

[JeffS]

All under one roof? This would be more like GM with inter-competing products.

[nadepalma]

More information on this HERE:

But here is an interesting quote from the article:

STUTTGART, Germany, Nov 9 (Reuters) - German sports car maker Porsche may not raise its stake in Volkswagen if the so-called VW Law is not repealed, a source familiar with the situation said on Thursday.

The law prevents any individual shareholder from exercising more than 20 percent of VW's voting rights, regardless of the size of the stake. It was put in place after the German state privatised Volkswagen in 1960, in order to prevent a takeover.

The source said Dec. 12 would be a key date, since the European Commission plans to challenge the law during a hearing at the European Court of Justice on that date.

Now that adds to it -- they won't raise their stake UNLESS they drop the law -- well why would they take this stance unless they wanted to take their stake above 30%? I wonder what the outcome would be.

[nadepalma]

Originally Posted by ChevroletRevived

It's all VERY interesting. I think it'd be good for Porsche to buy VW so they wouldn't be bought out by another automaker, as the VW Law is against the EU's regulations, as nadepalma pointed out.

Right, exactly. If the Germans and the state of Lower Saxony are really worried about the possibility of VW getting gobbled up by a foreign automaker, then I'd be pushing for Porsche to simply buy out VW and call it a day. The fact of the matter is that the VW Law WILL FAIL in court --- it's simply breaking the competition laws that the EU has established as essential in creating long-term growth for Europe as a whole -- and a key part of that is no protectionism by governments and unions, etc. If the EU was getting all worked up 4 years ago when the Italian government was thinking of buying a stake in Fiat and creating "ItalAuto" (an on again, off again idea that they've been playing with for decades as Fiat goes from one financial disaster to another) before they got their act together, then there is NO way that the EU will simply allow the law to continue and offer protectionism to VW. They've put up with it for now, but it's inevitable that the court will strike the law down and that folks will start nipping at the heels of VW. Keep in mind that for all it's size and number of brands, VW is hamstrung by union/labor issues, overlapping models, etc. so Porsche (the most profitable car compnay in the world) bellying up enough cash to the make such a big purchase isn't surprising.

As such, if the idea of seeing VW in foreign hands is a bad one for the folks in Lower Saxony and Berlin, then they'd be wise to take the law, scarp it in advance before they have to go to court over it, and prod Porsche to take over the company as a whole. At the very least the flag will move from Wolfsburg to Zuffenhausen -- but at most it will preven VW from being taken over by another firm.

Makes a whole lot of sense to me if "nationalism" and protecting workers is a big factor behind this.

[johnny smallblock]

Originally Posted by SimonDavid

I think they want to split it with Porsche taking Audi and VW being sold on

Sounds like a smart long term move to me - VW is getting eaten by high labour costs and import competition, Audi is a much stronger long term bet.

Also there's pressure at an EU level for the repeal of the WW2-era Volkswagen law that prevents VW being overtaken

I wonder if Toyota is sniffing around?

Why would Toyota have any interest in VW? Toyota outsells VW. Lexus outsells Audi. With Subaru, Toyo has access to an awd sytem if they want. There's just no reason for it.

But VW/Audi and Porsche makes great sense. Porsche and Audi don't overlap in their core business at all (SUVs are not either one of their cores). Audi could stop pretending to want to make 2-doors and Porsche doesn't have to waste their resources trying to build 4-doors. VW can be sold or fixed, but either way, it can stop pretending to be a luxury car maker.

[1BadPig]

IF Porsche buys VW, then I wonder where Lambo would fit in? Could it soon become an orphan again?