Porsche's Wiedeking on Death Row

Bertel Schmitt
by Bertel Schmitt
porsche s wiedeking on death row
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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  • John Horner John Horner on Apr 26, 2009

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

  • Rcolayco Rcolayco on May 07, 2009

    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.

  • Lou_BC this link shows number of units waiting to be sold: https://www.theautopian.com/theres-a-753-day-supply-of-jeep-renegades-and-other-cars-that-are-slow-to-sell/There are 7630 Renegades rusting on dealer lots. 7 of the 9 on the list are Stellantis products. The Chevy 4500 chassis cab high inventory reflects what I see in my world. Ford and Ram have the chassis cab market well in hand.
  • MaintenanceCosts We need a system to get unsafe hoopties off the road. But the existing state inspection systems relying on corruptible private garages ain't it. It needs to be federally overseen, consistent, and cheap.
  • Paul Like an electric Duesenberg SJ, a vehicle not fit for the economic times it was born into. When the general public is upside down and 30 days late on an 84-month loan at 22.9% on their Kia Rio, this doesn't seem to be the answer to a question most people are asking.
  • Drnoose Since they are going to still hit you with the fee anyway, it will not make that big of a difference.
  • Steven in Queens I've driven both the Renegade and Compass in rental/fleet situations and they seemed really close in size and they're similarly priced as well. I thought both felt cheap and unimpressive. Must be tough for dealers to offload one over the other unless a customer really has an appearance preference.