Porsche: Fix It or Sell It?

Bertel Schmitt
by Bertel Schmitt

Porsche, up to their eyeballs in €9B debt, resulting from their Davidian grab for giant Volkswagen, scheduled an extraordinary supervisory board meeting for July 23, Automobilwoche [sub] reports. On the agenda: How do we get out of this mess?

Board members told Automobilwoche that they will discuss a possible investment by Qatar worth over €5B ($7B). More explosive: They will also decide whether 49 percent of Porsche will be sold to Volkswagen. It could be one or the other. Or both.

According to Bloomberg, the market value of Volkswagen stands at €68.7B. The stock exchange values Porsche at €7.4B. Paper assets clearly exceed hard liabilities.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Rcolayco Rcolayco on Jul 11, 2009

    Bertel Schmitt: Please tell me if I'm wrong about this. What's regrettable about this whole episode is how VW & Porsche have been put in play by the vaulting ambition of Wiedeking & the acquiescence of Wolfgang Porsche. The inevitable result of their "David/Goliath takeover" adventure was to load Porsche with a debt load that would render Porsche non-viable as a business entity unless . . . they could get hold of the VW cash hoard upon take-over & use THAT to liquidate the crushing debt burden. The next inevitable result is to create serious distraction on the part of both companies' respective managements from the task of running their businesses. And along with that, created the current instability of ownership of both companies. VW did NOT need additional capital till it encountered the current need to resolve the debt problem brought upon it by Porsche's financial misadventures. Unlike Daimler-Benz & other companies, there would have been no need to face the prospect of third party capital coming in, which will in turn create uncertainty as to the direction of the business.

  • Bertel Schmitt Bertel Schmitt on Jul 11, 2009

    rcolayco : As you said. I would also not exonerate Piech. He definitely was part of the Davild/Goliath takeover - until the "hired help" Wiedeking developed delusions of grandeur.

  • Venator Venator on Jul 11, 2009

    Bertel, thank you for the link. It is very informative. Keeping in mind where these companies are coming from, one gets the impression that members of the Porsche-Piech clan view Volkswagen as their birthright.