By on April 25, 2009

Scheisse! Picture courtesy Spiegel.de

Until a few weeks ago, Porsche’s Wiedeking and his CFO, Holger Härter, were feted as the masters of the universe and Jesus Christ rolled into two. After pulling off the impossible feat of showing more profits than sales twice in a row, the two were said to be able of walking on water while turning it in to wine. Now, they are busy updating their résumés. Or maybe even their last wills.

According to the German magazine Der Spiegel, “the fate of Porsche chief Wendelin Wiedeking and Porsche’s CFO Holger Härter appears to be sealed. Large parts of the Porsche-Piech clan want to keep the two on board until there is a solution to Porsche’s high debt load. Then they have to go.”

In a sit-down with The Family, the two were accused of having committed inexcusable mistakes and of putting Porsche in peril. Their departure is “only a matter on months” said a confidante of The Family, obviously dispatched to prepare the world for the impending demise.

The fall from champs to chumps was caused by a sudden shortage of money at Porsche. While David Porsche took over Goliath VW, little Dave bit off more than he can chew. Härter had bragged to The Family that “banks would line up to give Porsche €10 billion, possibly even €14 billion to €17 billion.” Instead, banks played hardball.

Porsche barely got their €10 billion, but had to put their VW stock in hock. Even more embarrassing and threatening, The Family had to take their crown jewels to the pawnshop and sign over shares in the mother ship, Porsche Holding GmbH in Salzburg, as security.

In a few months, Porsche has to pay back €3.3 billion—if they don’t find a new investor, they are done. According to Der Spiegel, “Porsche’s gain is nearly completely eaten up by the interest for the debt.

Suddenly, reports of Volkswagen buying Porsche’s car business don’t look like the clever move, as the story was spun. According to Automobilwoche [sub] it’s payback time for Ferdinand Piech, who wanted to get rid of upstart Wiedeking. On Piech’s side: The state of Lower Saxony and the powerful unions. It’s not beyond imagination that there may be a bit of revenge in play for the gigantic short squeeze caused by Wiedeking & Härter. As any auto engineer has learned: What goes around, comes around.

Porsche is denying all allegations of an impending defenestration, of any mistakes made, and of any financial troubles. All hunky-dory in Zuffenhausen.

In the meantime, The Emir of Qatar plans to buy a stake in Porsche, possibly shoring up the German sportscar maker’s strained finances, the German magazine Focus reports. The head of the gulf emirate has informed Porsche of his interest, Focus says.

The bank managers should be pleased to see Wiedeking go, because this would make them look less impoverished. Wiedeking “makes more money than two dozen German bank CEOs in total,” says das Handelblatt. If Wiedeking goes, we’ll be losing the best paid auto CEO of the universe. His salary last year was €80 million—his contract says that he’s entitled to an annual bonus of 0.9 percent of Porsche’s profit.  He probably saved enough for a nice early retirement.

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13 Comments on “Porsche’s Wiedeking on Death Row...”


  • avatar
    rcolayco

    Not at all surprising. While Wedeking deserves credit for saving Porsche by streamlining its production system (partially by hiring retired Toyota production engineers to install a miniature version of Toyota’s lean and mean system) and sharpening its marketing skills, he appears to have been ultimately overcome by excessive ambition.

    My fear all the while was that he would cause Porsche to lose its engineering focus; that in his hell-bent drive to create and head the anti-Toyota, he would cause Porsche to become just a subsidiary of a behemoth run by bean-counters.

    Witness how he openly challenged Ferdinand Piech, demanding that VW cease its “excessive and wasteful” practice of spending on product development. He would see Bugatti off as soon as he could.

    Somehow, I never could believe that the financial game played by him and his CFO would not in the end prove a huge mistake.

  • avatar

    So, how much does the press ever really know about what’s going on?

  • avatar
    ConejoZing

    “So, how much does the press ever really know about what’s going on?”

    Ahhahah! :D The press is almost like a schoolyard gossip column sometimes, isn’t it? That’s why I don’t subscribe to a newspaper or have cable tv – why pay for what is essentially immature gossip?

    So uh, anyway. Just make some good cars, ok?

  • avatar
    TonyJZX

    the word i’m looking for is ‘Schadenfreude’

    never has it been more appropriate than here

  • avatar
    stuki

    First by inflation, then by deflation…..

  • avatar
    ZoomZoom

    The “press”, at least that of the mainstream variety, often parrots itself as a giant echo-chamber. One decides the “catch word” or “catch phrase”, then they all start using it.

    Like when they tsk tsk’d Bush 43 about “lack of gravitas”.

    But by using their catch phrase they think they don’t have to “think” anymore; and half of them have never even heard of fact-checking.

    As a consequence, they lose their own “gravitas.” And readers. And viewers. It’s no surprise that they never GOT the listeners in the first place…

    Bertel: I apologize for my ignorance, but can you (or somebody else) tell me what “[sub]” means? Thanks!

  • avatar

    Bertel: I apologize for my ignorance, but can you (or somebody else) tell me what “[sub]” means? Thanks!

    Well, that depends in what context. In the TTAC context, it means “subscription” – you need to pay or at the very least register to access the source.

    In the Navy, it means submarine. In BDSM …. but I digress.

  • avatar
    Robert Schwartz

    It is condign punishment for green lighting the Panamera.

  • avatar
    Robert Schwartz

    @Michael Karesh: The answer to your question is nothing. They just like to make up stories. Read The Black Swan.

  • avatar
    LADucSP

    “committed inexcusable mistakes”?

    Oh, you mean: “Cayenne”, and “Panamera”!

  • avatar
    Luther

    “First by inflation, then by deflation…..”

    Exactly.

  • avatar
    John Horner

    I’m confused. How did Porsche make record profits playing the markets and end up desperately short of cash?

  • avatar
    rcolayco

    Well, looks like it’s now happened. Wedeking’s vaulting ambition has apparently been thwarted. Instead of Porsche controlling VW, the two companies are to be merged, with Porsche ending up as merely one of ten marques owned by the merged entity. Hard to believe he’d end up as top honcho in the emerging structure. Time will tell, but I wouldn’t bet on it.

    Ultimately, the Porsche/Piech clan had to worry about their company being saddled by such huge debt in a car-market that decidedly does not appear bullish in the short run.

    Wedeking had caused a rift between cousins Ferdinand Piech (whose position his moves threatened, and whose policies he openly critiicized) and Wolfgang Porsche (who was supportive of Wedeking until just now that the crushing debt burden incurred by Wedeking’s moves got him worried). So what’s happened? Another case of blood being thicker than water? Methinks more like common sense overcoming ambition.

    As I stated in my previous posting on this subject, I had worried that Wedeking would in future, diminish VW’s substantial budget commitment to engineering development and instead milk what’s there, in favor of chasing market share. This latest development will hopefully prevent that.

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