Porsche's Future Mit Dem Volk

Since 1969, Porsche has developed three vehicles with Volkswagen/Audi: the 914, 924 and Cayenne. While we can debate the contributions these vehicles have made to Porsche’s corporate survival, they’re not vehicles that have brought greater glory to Porsche's sports car cred. And yet Zuffenhausen's zealots want us to believe that their decision to take control of Volkswagen is a good thing for both automakers. How credible is that?

My go-to Porsche guy, salesman Kirk Stingle, is on board with the German automaker's justification for its "Maus That Roared” Vee Dub takeover. With the so-called Volkswagen law (guarding Lower Saxony’s controlling interest in VW) headed for the legal dumpster, Porsche had to move to protect its parts supply. “You like your air conditioning unit?” Kirk asked. “Without VW? Fuhgeddaboutit.” For its part, VW gets Porsche’s production expertise.

Uh-oh. That sounds an awful lot like a lopsided proactive synergy defense. Do the letters DCX mean anything to anyone? To me, Daimler-Benz’ failed hook-up with The Crisis Corporation reveals a truism: the Germans aren’t very good at playing with others. Of course, in this case, we have Germans playing with Germans.

In fact, the acquisition is a German version of “All in the Family,” with VW Boss and Porsche shareholder Ferdinand Piëch playing Archie to freshly minted CEO Martin Winterkorn’s Meathead. Imagine the hilarity when they discuss the workmanship produced by Porsche’s foreign plants! Alternatively, schwäbisch Sopranos.

As we’ve outlined here before, VW is in an echt Pökel. The automaker's obese brand portfolio is a disaster. VW, SEAT and Skoda battle each other at the low end (hemmed in by Audi), while Audi, Bentley, Lamborghini and Bugatti duke it out at the top. Meanwhile and in any case, the German labor unions have Volkswagen by the short and curlies.

So here’s the theory: by minimizing the State of Lower Saxony’s ownership/control of VW, the takeover will loosen the union’s hold on the company, which will allow VW to bring some “sense” to their German labor contracts. At the same time, Porsche wunderkind Wendelin Wiedeking will teach VW how to make money through outsourcing, engineering, rationalization, platform sharing and generally kicking ass.

Time for some unbequem Wahrheit.

Despite calls for his resignation, the CEO who got VW into this mess in the first place is still large and in charge. I wouldn’t call Ferry Porsche’s grandson a megalomaniac, but this is the same CEO who publicly declared VW’s intention to match Mercedes-Benz’ product line model for model, up to and including the S-Class (hence the ill-fated Phaeton). Look how well THAT strategy turned out.

By the same token, Piëch’s “grand” vision created VW’s bloated brand portfolio. By adding Porsche to Volkswagen’s stable (or vice versa), brand overlap is about to get worse, not better. We’re talking Porsche 911 vs. Audi R8; Porsche Boxster vs. Audi TT; Porsche Cayenne vs. Audi Q8; and Porsche Panamera vs. Audi S8, Bentley Continental GT and VW Phaeton.

Although Piëch is reputed to rule his complicated kingdom with an iron fist, there’s still a GM-style bureaucratic bun fight to see who gets how much of what technology and marketing support, and when they get it. Can Porsche really work its cost-cutting magic on such a convoluted corporate culture? While Porsche knows a thing or two about building excellence on a budget, what makes them think they can convince thousands of managers and engineers that small is beautiful?

To my eye, this whole deal looks like a not-so-simple extension and consolidation of Piëch’s power. On the face of it, Porsche gets VW. In fact, Piëch gets Porsche AND ditches Lower Saxony. What he doesn’t get– and isn’t up for discussion– is a plan for extricating Volkswagen from its German labor woes and the branding Hell the former VW CEO and current Board member created.

Not that I care what happens to VW. As far as I’m concerned this deal should be called “Cry My Beloved Automaker.” Porsche, my favorite automaker on planet earth, the company that produces the best sports car money can buy, the poster child for this website’s “stay small, stay focused” mantra, is about to be subsumed by Volkswagen’s gi-normous bureaucracy.

Anyone who thinks this German merger of unequals won’t affect Porsche’s ability to keep their eye on the ball should carefully consider the 914, 924 and Cayenne. These vehicles stemmed from a partnership with VW, where Porsche could have (should have?) pulled the plug on any or all aspects of the various projects. Can you imagine a Porsche designed by a committee balancing its needs against those of VW, SEAT, Skoda, Audi, Lamborghini, Bentley and Bugatti?

In a world of compromise, Porsche stood apart. Not anymore.