Porsche NFSW Watch: Berlin Gives Brussels The Finger, Porsche May Want Rubbers
Yesterday, we reported that the European Commission threatened to drag Germany in front of the European High Court again– if Germany dares to pass a revamped Volkswagen Gesetz (VW Law.) Yesterday evening, the German parliament flipped a whole aviary worth of birds in the direction of Brussels, and passed the face-lifted law with an overwhelming majority. Result for the time being: VeeDub’s soon majority-owner Porsche will have to kowtow to the state of Lower Saxony, owner of a paltry 20.1 percent of the shares. Porsche must ask for their OK on major issues. On one issue, Porsche doesn’t even need to ask. Lower Saxony will say “nein, nein, nein” to Porsche booking VW’s profits as theirs. Und now European Trade Commissar Charlie McCreevy will file papers “before Christmas,” and the contemptuous Bundesrepublik Deutschland will face the judges of the European High Court. Again. The court will rule (anybody guess how?) Germany will have to implement the wishes of the court again (anybody guess whether they will?) The never-ending saga continues. In the meantime…
The recalcitrant Lower Saxons are setting a trend in Deutschland. The state of Baden-Württemberg, home of Daimler and Porsche, is now making noises about buying a chunk of Daimler. Baden-Württemberg’s Premier Günther Oettinger “won’t rule out” the possibility that his state may take a financial interest in the maker of luxury conveyances. Their stock is currently, shall we say, undervalued. Asked whether his state might eye shares of other car manufacturers also (hint, hint, hint), Oettinger gave the flippant retort: “Well, you can rule out Toyota.” And then…
In today’s early trading, the stock of Continental, maker of fine rubbers (such as tires) suddenly jumped 50 percent. And that, wie bitte, while parts suppliers are in S&P’s dog house? Schaeffler, a family-owned maker of ball bearings, had used some pages out of Porsche’s playbook, and acquired 90 percent of Conti, with 10 percent still floating around somewhere. Today, rumors erupted at the German stock exchange that Porsche was/is in on the deal, Automobilwoche (sub) reports. The minute the Börse hears “Porsche,” stocks go ga-ga. “The rumors are groundless, ” said a Porsche spokesman a few hours later. The rubber stock came back to earth after that, but at the time of this typing, it’s still up 30 percent. With a few well-placed derivatives, a good chunk of new money could have been made. Why Porsche even bothers building P.J. O’Rourke’s dream car is anybody’s guess.
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.
More by Bertel Schmitt
Comments
Join the conversation
BlueBrat, P.J. was one of the three best writers that C&D ever had grace their pages. Funny, literate, definately not PC (when you could still have fun in print). Was not really a car guy, but he was close enough. If you have access to old copies of C&Dfrom that era, do re-read his stuff. I find it much akin to watching Blazing Saddles. I shan't regurge my (slightly tongue-in-cheek) justification for Porsche's recent Geckovian excesses. Hedgies pull much larger tricks than this every day. That's how they stay in business. That's why the market is a casino for the rich. Yeah, yeah, much of what they do is illegal. Cramer wrote down major SEC violations in his last book. Anybody seen him in non-recreational handcuffs yet?
What's the deal with Lower Saxony? Did they finance VW's rebuilding after the war, and thereby acquire control despite a minority equity interest, akin to the Ford family's control of FoMoCo? Brussels better be careful. Belgium's border with Germany is still as hard to defend as it was in 1914 and 1940. Uh, no offense meant to peace-loving Germans.