By on April 25, 2015

"It wasn't Domino's. Someone delivered Wiedekings head." Piech and Winterkorn.  Picture courtesy handelsblatt.de

While Chief Executive Martin Winterkorn wears bruises from the conflict, Ferdinand Piëch has paid the ultimate of price and resigned his chairmanship with immediate effect.

According to Reuters, the ongoing row between CEO and Chairman at Volkswagen eased this past week, but when the group’s supervisory board put their support behind Winterkorn, the 78-year-old grandson of Ferry Porsche was left “isolated” in a five-to-one vote. Sources told the newswire service Piëch’s decision to not support Winterkorn put his own position in jeopardy. Piëch’s wife, Ursula, also resigned her positions within the company.

Piëch will be replaced by Deputy Chairman Berthold Huber in the interim. A vote on when a new Chairman will be chosen has not been announced.

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52 Comments on “BREAKING: Piëch Resigns Chairmanship, Winterkorn Continues as CEO at VW...”


  • avatar
    Pch101

    Kind of a mixed bag. As has Bob Lutz, the guy had some great ideas but also produced quite a few turkeys with a large side of hubris.

    I wonder if they’ll kill the Phaeton. It was one of his losing babies.

    • 0 avatar
      Car-los

      I hope they don’t kill the Phaeton, I love that car…

      • 0 avatar
        HerrKaLeun

        If you didn’t buy a Phaeton, your statement is meaningless to VW or any other company or any real world person outside the Internet.

        Millions of high school kids like Ferraris. doe’t mean Sergio should boost up production to 1 mio. Ferrari/year.

        • 0 avatar
          28-Cars-Later

          Do high school kids and other fanboys like Phaeton in the same way though?

          • 0 avatar
            Pch101

            A meeting of the US Phaeton fan club could be held in a studio apartment, with room to spare.

          • 0 avatar
            whynot

            Is that because there are not a lot of fan boys or because their phaetons all broke down on the way there?

        • 0 avatar
          heavy handle

          The Phaeton’s mission was to sell a lot of Passats at a significantly higher price, and to sell Golfs at 10% more than the equivalent Focus.
          Although that strategy didn’t work in the US, it’s hard to deny that the Phaeton coincided with a huge increase in volume and margins for VW worldwide.

          • 0 avatar
            Pch101

            The Phaeton is a considerable money loser generally, with a factory that operates well below capacity. It didn’t just underperform in the US.

          • 0 avatar
            RobertRyan

            @Heavy Handle,
            Maybe perceived Strategy in the U.S., but having Audi and Porsche as stable mates and the increasing size of VW, helped drag customers in.
            Phaeton was the top of the VW division

          • 0 avatar
            mkirk

            Oh look, if it isn’t RobertRyan. Well you can make like your little buddy Al and SHOVE IT TOO!!!!!

        • 0 avatar
          motormouth

          If you didn’t buy a Phaeton, your statement is meaningless to VW or any other company or any real world person outside the Internet.

          That’s an absurd statement, basically saying you can’t comment on any model unless you’ve bought one. Following on from your idea, no one can say any girl or guy is good looking unless they’ve shagged them.

          • 0 avatar
            RobertRyan

            @mkirk,
            With a comment like that, there are professionals who can provide the appropriate psychiatric help

          • 0 avatar
            mkirk

            Naa, you don’t have to have shagged them…a simple “I’d do her” will do.

            And Big Al/Robert Ryan…SHOVE IT

  • avatar
    28-Cars-Later

    Na na na na, na na na na, hey hey hey, goodbye

  • avatar
    Waftable Torque aka Daniel Ho

    Karma would be complete if Wiedeking or Pischetrieder took his place.

    • 0 avatar
      th009

      Wiedeking is retired, living off a EUR 50M retirement package. I doubt we’ll see him back in the industry.

      Pischetsrieder is currently the chairman of Munich Re. Probably a nice cushy job compared to what he dealt with a VW.

      You forgot to include Bernhard on your list!

  • avatar

    With the stock holdings of the Porsche/Piech families amounting to 51% of the VW group, isn’t this just a little bit like Ford Motor Company showing Bill Ford the door? My guess is that Piech lost support from within his own extended family. There’s been a long running conflict between the Pieches, descended from Dr. Porsche’s daughter, and the Porsches, descended from his son. Wolfgang Porsche was one of the 5 votes backing Winterkorn.

    In any case, PIech is fabulously wealthy, and can retire to enjoy his grandchildren. With 12 offspring from four different women, I’m sure he has a grandkid or two he can dote on.

    • 0 avatar
      ect

      He’s also long past the date at which Board chairs are expected to retire. The members of the Supervisory Board may have seen this as the opportunity to force a long-overdue retirement.

      The fact that a company the size of VW appears to have not had a succession plan in place speaks volumes about Piech.

  • avatar
    hreardon

    I think a lot of the press is missing the bigger question here: why, exactly did he lose faith in Winterkorn? Say what you will about Piech, the man is nothing if not very aggressive and barring a few of his turkeys – very right about the direction of the automotive industry.

    Men like Piech get where they are and push as hard as they do because they’re looking out over the horizon. Not just around the next corner, not just over the next hill – they’re looking clear across the sea for the oncoming storms.

    One does not get a behemouth like Volkswagen, with its competing fiefdoms, labor and political concerns, et al., to change course and/or work toward a goal without some major energy, focus and guts.

    My guess is that while he admires the work Winterkorn has done in the past (he’s the father of the MLB architecture at Audi which was then brought over to VW with MQB), he sees in Winterkorn someone who is getting too comfortable and not hard charging enough to take the group to the next level. In the auto industry, as in technology, one does not get the privilege of riding on past successes – only the ‘next big thing’ really matters.

    So while Winterkorn has done phenomenal work getting the VW Group to where it is today, my guess is that Piech sees something in Winterkorn that leads him to believe he’s not the guy to take them over the hump into the finals. Maybe it’s misplaced, but I’d put money on Piech’s nose being (ultimately) right on this one – but his stereotypical lack of tact and playing politics in this matter are at issue.

    Winterkorn has a lot of support – but I wonder if that’s merely because he has been able to keep VW’s warring factions happy at the expense of the long term success of the company. Something to help frame the debate a little: John Sculley, former CEO of Apple, was well known for keeping the ship aflot by keeping his executives fat and happy and not making many risky, forward thinking bets (“Newton” not withstanding).

    • 0 avatar
      Pch101

      “While Piëch gave no details as to what caused the rift between him and Winterkorn, media reports speculated it had a lot to do with VW’s recent poor performance on the US market and sales problems in China. There was also much talk about VW having failed to produce a budget car and about not having managed to come up with a viable e-car model.”

      http://www.dw.de/vw-chairman-pi%C3%ABch-denies-plot-against-ceo-winterkorn/a-18403487

      Note that those items are speculative. It may have had more to do with workplace politics than business operations.

      • 0 avatar
        hreardon

        Pch –

        Yeah, I’m aware of the report you linked to and concerns about the US market – but these are issues that go back decades and are, arguably, just as much Piech’s fault. I think the comments about the electrification and budget car are more telling and go back to my comments about looking out over the horizon: Winterkorn is probably too focused on there here and now and not pushing aggressively enough toward those areas where Piech sees the market headed.

        I actually doubt it had much to do with politics – contrary to media reports, Piech doesn’t really strike me as one to play games/politics: he’s the kind of guy who sets a goal for his team, and you either achieve it – or he gets rid of you.

        Bob Lutz once retold the story of how Piech pushed his engineers to implement 3mm panel gaps on their cars, you can find it on You Tube, but it sounds very familiar to how some of my clients’ executive teams operate: here’s the goal, if you can’t do it I’ll find someone who will, thank you and goodbye.

        • 0 avatar
          Pch101

          For what it’s worth, C/D’s European correspondent (who from what I have seen is actually pretty sharp) reiterates similar business points:

          “At the top of the list: Volkswagen’s lack of success on the U.S. market, which is described as “disastrous.” The brand’s strategy of wooing customers with premium, uplevel products has not paid off; it is lacking new, interesting, and affordable products in key segments; and its costly production site in Chattanooga, Tennessee, is woefully underutilized.

          VW’s return on sales, which stood at a solid six percent when Piëch stepped down from day-to-day operations in 2002, has steadily dropped to an alarming 2.5 percent—a number which some even believe to be overly optimistic. The Group has failed to turn its Spanish subsidiary SEAT into a meaningful player with its own identity, as differentiating the brand has failed in both styling and content. A push into the Brazilian market is faltering, and success in China is more uncertain than ever as the explosive growth that once characterized the world’s largest market slows.”

          http://blog.caranddriver.com/vw-drama-why-piech-wants-winterkorn-out-and-what-the-future-may-hold/

          • 0 avatar
            th009

            Assuming that all fault for US market problems (which mostly relate to the lack of appropriate product) lies with Winterkorn, when Piech has been the head of the supervisory board, is somewhat disingenuous.

    • 0 avatar
      Whatnext

      Hmm yeah or maybe it was just a feat of childish senior petulance. All of us with aging patents have seen the quirks that come with old age. 78 is too old to be the chair of a major publicly held company.

  • avatar
    talkstoanimals

    Oh no! Now whosever shall advocate for Volkswagen to buy more redundant brands, make $70k VWs no one buys, and manufacture absurd million dollar hypercars that still lose money?

    • 0 avatar
      RobertRyan

      “Oh no! Now whosever shall advocate for Volkswagen to buy more redundant brands, make $70k VWs no one buys, and manufacture absurd million dollar hypercars that still lose money?”
      Same can be said of Ford with it’s Ford GT. VW sells a lot of Audis so no tears there Skoda is a one of the money spinners for VW

  • avatar

    The acting Chairman of the board is a unionist.
    From the NYT, “Berthold Huber, a labor leader who is deputy chairman of the supervisory board, will serve as acting chairman”.

    • 0 avatar
      th009

      That’s the way the supervisory board works: the deputy (who represents labour) takes over if the chair resigns. Generally the labour representatives are not antagonistic at VW — they support Winterkorn.

      A new chairman will be chosen at the annual meeting next month. My bets are on Winterkorn moving up and someone else (maybe Vahland) taking over as CEO.

    • 0 avatar
      probert

      “unionist”?
      If you research German labor laws you’ll see that Unionists are required to serve with Managementistas on corporate boards. This type of cooperation leads to what is known as a high quality of life-unism. As opposed to a a race down to second world living standards – also referred to as “Americanism”.

  • avatar
    wmba

    The old guy had been pretty cartoonish in his behavior the last six or seven years. Twelve kids by four women over the decades as well.

    This past TTAC editorial from 2009 about Piech isn’t that interesting itself, but the comments are!

    https://www.thetruthaboutcars.com/2009/05/editorial-ferdinand-piech-the-godfather-pt-1/

    As for today, when VW is being criticized for the lousy 2.5% return at VW group itself, and US-centric musing that somehow the poor US performance was at the root of the Piech/Winterkorn dust-up, I still have the opinion that the criticism Piech received over plowing ahead with Phaeton II is the root cause. I think he blamed Winterkorn for letting out financial numbers to the press that described the $28,000 loss per vehicle of Phaeton 1.

    It’s pretty stupid to saddle VW Group with more losses when they’re trying to economize, but Piech didn’t appreciate his “genius” being criticized. Such distressing shots into Piech’s halo of infallibility could not be tolerated, hence the distancing from Winterkorn, whether the man was guilty or not.

    This whole episode has been pretty personal for the combatants and far removed from straight business, but the latter is what is used as PR camouflage by the spin-set. The old boy tried to jimmy the system one time too many to get rid of potential rivals to his hegemony, and lost.

    Now, as penance, Herr Doktor Professor Ing F. Piech, spend some time in retirement regretting that Audi 100LS you foisted off on me in 1974. The brochure I still have shows “craftsmen” sewing leather, but the line operators must have only been equipped with a multiblade screwdriver, adjustable wrench and a rusty pair of pliers when they made mine – and everyone else’s.

  • avatar
    pdl2dmtl

    I did not see that coming….could there be something the media does not know?
    I hope now, Winterkorn for the sake of VW does not become too comfortable at the helm.

  • avatar

    His reign was a triumph of will. I hope he saved enough money for retirement. He looks like mad scientist though.

  • avatar
    ciscokidinsf

    The point of the Phaeton was achieved – ultimately it failed in the US, but Europe and Asia use Phaetons as government approved rides, and they are also heavily used for UN/EU personnel. While true, the Phaeton is not selling at anywhere close the quantity of a BMW 7 series, the car’s purpose became different. Its now intended to be car for heads of state. Remember, Mercedes didn’t build the Grosser long platform cars for a mass market or to make money on them – but because it furthers the brand, from the Queen to Idi Amin. The Phaeton is now a car for Heads of state, Popes, Discrete billionaires, Davos groupies et al

    In on my 2nd Phaeton so I can speak that the reliability issue is more myth than truth- My first one made it from 78,000 miles when bought to 140,000 with me in 7 years with expensive but not unreasonable issues for a German Flat V8. Car is 50% sensors and those are buggy as all hell, but no major components fail in the engine. The most dangerous failure is the air suspension shocks, but now they are plenty in the 2nd market, no need to replace all. Phaetons can be managed at a price. Fun fact – the US Phaeton has never been recalled for anything ever, something its other VW brethren can’t say.

    Piech, however. should’ve been more patient. VAG is number 2 or 3 auto manufacturer in the world (depending on the month), so Winterkorn is certainly doing his job, despite the big-ass deficiencies in the US and China market. IMHO – this can be fixed and VW can do it. But Herr Piech has never been patient and has probably gotten more irritable with age. So I just hope VW continues the production of the Phaeton, although I really doubt it as the MK II Phaeton has not really have gone beyond a rough digital prototype that looks not that elegant to me. http://totalcarmagazine.com/features/2014/05/23/vw_s_flagship_model_will_be_a_cheap_giant/
    The current one 2015 model you can buy in Europe still shares the vast majority of the main platform, interior and V8 engines as the ones sold in the US – I hope, I hope they try one more time, even if the car is no longer a Bentley in disguise.

    • 0 avatar
      ect

      Why is it that nobody on the internet knows the difference between “discreet” and “discrete”? Are they all totally illiterate?

    • 0 avatar
      derekson

      Supposedly the GTE C Couple they showed in Shanghai is a thinly veiled preview of the next Phaeton.

    • 0 avatar
      motormouth

      The point of the Phaeton was achieved – ultimately it failed in the US, but Europe and Asia use Phaetons as government approved rides, and they are also heavily used for UN/EU personnel.

      The French government using Peugeot 607s as official cars didn’t save the model from the scrap heap.

  • avatar
    28-Cars-Later

    His parting gifts include all of the unsold VW Phaetons.

  • avatar
    Mr. K

    We have always been at war with EastAsia. The recent issues in Eurasia are of minimal import.

    Without a major revolution EastAsia and Oceania will continue to hold hegemonic power in the markets west of Airstrip one.

    China owns Volvo. So What. VW is #3. So What. Toyota, Nissan and Honda will share the Oceania market west of Airstrip one with F150co and C/Kk1500co.

    Eurasian players will continue to play a minor part in the west of Airstrip one Oceania market.

    Unless Fiat and VW merge.

  • avatar
    zerofoo

    Until VWs can go 150,000 miles on reasonably priced scheduled maintenance they will never succeed in the US market.

    Too many other car companies are priced right, have great warranties and nice interiors. VW simply can not play the “German handling” card and expect their customers to foot the bill for their complicated and finicky machines.

    Build simple, cheap, reliable cars that aren’t penalty boxes on wheels and warranty them for 80,000 miles. That’s the only way to succeed in the US market.

    • 0 avatar
      bomberpete

      Yes. VW had its greatest US success building cheap, simple reliable cars. What’s more, they WERE penalty boxes on wheels but were fondly embraced.

      To protect twhat is left of its US turf and significant TN investment, VW should look at where Hyundai/Kia were 15 years ago. Study what they did – starting with that warranty – and apply some of the Audi dealer experience to the not-so-cheap seats.

      • 0 avatar
        bullnuke

        ^^ This. Back when air-cooled was cool a VW was cheap, reliable and, yes, a penalty box that after-market doo-dads would cure. I bought several new in the ’70s and ’80s; the problem started as I see it when the change to water-cooling came. My Scirroco and Dasher had silly, niggling problems (speedometer cables, carb adjustment on the Scirroco, cv joint issues) but the air-cooled cars/vans were dead reliable. The exception was the much maligned VW Fox (I purchased an ’89 wagon), my last new Volkswagen. Made in Brazil it was cheap, surprisingly reliable for a water-cooled VW and made it to 160k miles with minimal maintenance but pretty bland. This is where they need to go. The failure came when Volkswagen seemed to stop being Volkswagen and chase the other guys thus forgetting what made them successful.

        • 0 avatar
          HerrKaLeun

          how did watercooling impact CV joint reliability?

          are you one of the “before injection systems all cars were great”guys?

          • 0 avatar
            bullnuke

            The cv joints on the water-cooled were different from the rear-engined cars – turned left and right in addition to up and down with suspension travel. A bit different in design between the two. The boots would get a very small tear in ’em that wasn’t really obvious and loose all the lube. More than once I had “blue-balls” in the joint of the front drivers from this. And fuel injection is a god-send. 32 PICT carbs could drive you nuts – the dual Solex’s on the vans were a treat to sync. The idle circuit on one of these carbs was pretty silly.

          • 0 avatar
            HerrKaLeun

            What you are saying moving the engine upfront caused the CV joint problem, but not water-cooling it.

            I think introducing cheap design and parts along with FWD caused the problems, not the front or water-cooled motor itself. Every year some 50 million cars with water-cooled and front engine are produced with perfectly fine CV joints.

      • 0 avatar
        Pch101

        Once Datsun, Toyota and Honda made headway in the US, VW lost it. Not exactly a coincidence.

  • avatar
    MrCharlieWhyoming

    He’s got 80,000 problems but Range Rover ain’t one of em.

  • avatar
    Volt 230

    He was disgusted by the fact that VW’s superior German engineering could not copy Hyundai’s silent steering column adjustment that he marveled at a few yrs back at some auto show.

  • avatar
    motormouth

    This could really be a bloody shame for VW – and for the automotive landscape as a whole. Without Piech pushing through the Phaeton and Veyron, they probably wouldn’t have happened. Now the bean counters are well and truly in charge, there’ll be no more vanity projects and the world will probably be a worse place without them.


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