Editorial: Volkswagen's Piech Blackmails Porsche's Wiedeking: Deal by Monday or Die

Bertel Schmitt
by Bertel Schmitt
editorial volkswagen s piech blackmails porsche s wiedeking deal by monday or die

A week ago, we predicted that Volkswagen, buoyed by stellar numbers, would soon swat nuisance Wiedeking once and for all. It didn’t take long. Ferdinand Piech, chairman of the supervisory board of Volkswagen and co-owner of Porsche, pulled out a big gun and put it to the head of Wendelin Wiedeking, CEO of Porsche (and theoretically Piech’s employee). Piech said (we are paraphrasing in the interest of brevity): “Say uncle by Monday. Or you’re dead.” Nice family.

According to Der Spiegel, VW and the state of Lower Saxony set Wiedeking a deadline. If he doesn’t accept the offer by Monday, Porsche’s already dire financial situation will become untenable.

The joint ultimatum goes like this: VW buys 49 percent of the Porsche AG for anywhere between €3 and €4 billion. The money goes to the Porsche Holding, of which Piech owns a good chunk. As a next step, the Emir of Qatar will buy the options for 25 percent of VW stock, which are held by the Porsche Holding. Then, VW and Porsche will merge.

When everything is said and done, the Porsche/Piech families will end up owning more than 40 percent of VW-Porsche, Lower Saxony will keep its 20 percent, Quatar will have 15 percent, another unnamed sovereign wealth fund (any guesses?) will hold five percent. Less than 20 percent will be publicly traded, which should keep the stock scarce and high.

This plan is the joint work product of VW CEO Martin Winterkorn, VW CFO Hans Dieter Pötsch, Lower Saxony’s Premier Christian Wulff and of course Ferdinand Piech. Der Spiegel didn’t name sources for the story. The details of the transaction are fine grained. There must be a big leak in the executive washroom on the top floor of the Volkswagen Hochhaus.

What if Wiedeking says no? Will he find the head of a horse in his bed? This is Germany, and the dealings are more subtle: If he says no, VW will recall its €700 million loan they had given Porsche last March to save them from bankrutptcy.

Should it come to that, the Emir of Qatar will walk. He made clear that he’s only interested in a Porsche-VW company where the owners share a common goal and are off each others’ throats. With the Emir gone and the loan recalled, Porsche AG (the car company) is DOA. If Wiedeking gives in, his job is DOA.

The story jibes with the information collected by the Süddeutsche Zeitung. Bankers told the SZ that Qatar has its eyes on big Volkswagen. They were only talking to little Porsche to get their hands on the VW options. To sweeten the deal, Qatar could deliver a chopped head to Wolfsburg: Wiedeking’s. Qatar doesn’t want to “fight with Wiedeking against the rest of the world.” To win over Piech and Lower Saxony, Wiedeking has to go. Judging from the ultimatum, Piech, Lower Saxony, and Quatar are already in agreement.

There is no other white knight that may ride to Porsche’s rescue. Daimler was rumored to be interested. Today, Daimler’s Zetsche gave Die Welt an interview and Porsche the cold shoulder: “If we would be interested in Porsche, we would tell them.” And: “Porsche is closely integrated with Volkswagen’s activities. It doesn’t make sense contemplating to replace this integration with another one.”

Zetsche also intimated that Porsche had leaked the possible link-up with Daimler: “I can understand that spinning the same story again and again can get boring. One likes to drop other names.” In other words: Porsche, get lost. Daimler has its own problems.

So what’s left for Porsche? All they can do is fume.

“Porsche’s chairman is furious with Volkswagen AG. Wolfgang Porsche said in a statement Saturday that the sports car maker would not be “blackmailed” into a merger with VW,” Automotive News [sub] writes.

More than miffed, Wolfgang Porsche flames in the direction of Wolfsburg:

We are deeply concerned and irritated by the wording of the ultimatum. The 21st century is not the time for ultimatums. We wonder what the whole matter is really about and whether the focus is still on our common cause at all.

We will not give in to such pressure or blackmail. Such action does not help anybody. It is detrimental to the entire cause. This is not the way to support and uphold common interests.

We sincerely hope that the perpetrators of the ultimatum, in consideration of our common interests, calm down again and follow up their proposals in internal discussions and not through headlines. We are open to such talks at any time.

The missileve was co-signed by Uwe Hück, Wolfgang Porsche’s deputy on the board and representative of the worker’s council. Workers and managers, unite! They must have been close to tears when they wrote this. All smugness is gone. The strongly worded protest confirms that Der Spiegel has its details right.

On Friday, Porsche had bragged it was close to reaching a deal with Qatar. At the same time, Qatar, Piech, and Lower Saxony got a little cozier. Now, all that’s left to Porsche is to whine and to invoke noble principles. It won’t work.

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2 of 21 comments
  • U mad scientist U mad scientist on Jun 29, 2009
    I think Porsche has always been too small and their profits too dependent on a “good economy” to really take over VW. All their money came from unreal “Wall Street” profits… and we know where they went. If they really were rich they didn’t need no stinkin loan… The same lesson was perfectly taught during the net/telcom boom a decade ago and likely countless times before. The only principles Machiavelli needed were that history repeats itself so you really only need to learn it once.

  • Amca Amca on Jul 01, 2009

    Overall, I don't care how this comes out. Just so long as they don't f*ck up the 911.

  • Lou_BC My kids drove around in a 2 wheel drive Chevy Colorado crew cab I bought off a neighbour when they were moving to Alberta. We kept it 4 years but sold it recently due to various engine codes popping up and the engine sounding more tired. It was one of the inline 5's known to have soft valve seats. All I had to repair was new front brakes and rotors, a wheel bearing and a battery. Both kids wrecked a tire clipping a curb. My oldest backed into it with his pickup which required a grill and headlight replacement. We bought a 2008 Corolla as a replacement for my 19 year old. It came with 4 new summers and a set of decent winter tires on rims. We'll run that until it looks like it will implode/explode. My oldest currently has 3 Cherokees (2 for parts), an F150 "Jelly bean", and a Mercury Grand Marquis. Insurance is very expensive for young drivers. That's why beaters can save some money. I haven't put them on my new truck's insurance since that would add around 90 per month in costs. I'll add my oldest to it temporarily so he can use it to get his "full" driver's license.
  • Arthur Dailey I grew up in an era when a teenager could work pumping gas or bussing tables and be able to purchase a vehicle for a couple of thousand dollars and drive it with 'uninsured' status.If a parent advised on the purchase of the vehicle, they would most often point us to a large, stripped/base version, domestic sedan with the smallest possible engine.These cars generally had terrible driving dynamics and little to no safety features, but were easy to work, had large bench seats/interiors and not enough power to get out of their own way.
  • MaintenanceCosts I'll guess: 3rd owner, never did even basic maintenance, major component failed, car got towed from the apartment complex parking lot, no one bought it at auction because the repair bill exceeded the value.The chrome pillar appliques support this hypothesis.
  • MaintenanceCosts I'm generally in the "I want them to have all the new safety stuff" camp, but new cars are both too fast and too isolating these days. They mask speed enough that a new driver can get way in over his head without really realizing he's even going that fast. This is especially a concern with my youngest, who wants to do everything he does faster. (He has zero fear tearing down hills at 25 mph on his little 20" wheel bike.) I'm hoping for something that is slow and communicates speed well, although I'm not quite sure there is any such thing in today's market.
  • KOKing I test-drove a used Equus Ultimate (the one with all the back seat doodads) that was a trade-in at a Ford dealer, and although it was VERY nice to be in as a Lexus LS with Ultra Luxury, it was supposedly in a minor fender-bender that probably wasn't repaired correctly (like a pinched bus cable or something?), and random features didn't work at all.I think this car suffered the same problem in the US that the VW Phaeton did, and probably would've done better if it was badged a Genesis from the get-go.