Piech's problem: his 'small-minded' family
|Christiaan Hetzner is Automotive News Europe's Germany correspondent.|
Ferdinand Piech's decision to sell his stake in his family's holding company that owns a majority stake in Volkswagen Group ends a lifetime spent in almost constant conflict with relatives he saw little use for.
Piech will sell the bulk of his 14.7 percent ordinary shares in Porsche SE, which controls 52.2 percent of VW Group's voting stock. He will leave Porsche SE's board when the transaction finalizes in several month’s time after expected regulatory approval.
Believed to be embittered after losing a power struggle that saw him depart as VW chairman in April 2015, Piech has since been a repeated thorn in the sides of his family, and even implicated his own cousin Wolfgang Porsche in VW's diesel scandal.
"The problem is not between the Porsches and the Piechs. The problem is between Ferdinand Piech and everyone else," said one person close to the families.
Piech, who turns 80 later this month, made a name for himself when he almost bankrupted his family’s sports car maker as a young engineer in the drive to win the legendary 24 Hours of Le Mans. His Porsche 917 was expensive to design and produce, using revolutionary technology such as its tubular frame made of ultra-lightweight magnesium. Piech spent a fortune to build a small fleet of them to fulfil the entry rules of the racing organizers.
While it paid off in the long run, burnishing Porsche's engineering credentials and setting the stage for a record number of wins at the hardest endurance race on earth, it led to a decision to exclude family members from operational decisions at Porsche, leading Piech to move to Audi, where he built up the brand's engineering prowess.
Piech's greatest days as an auto engineer and manager were still ahead of him and he never hid his disdain for his relatives - particularly the Porsches, whom he mocked for their Waldorf education that encouraged pursuits in the arts.
While Piech was stamping his footprint into history at Le Mans with a car that bore the name of the Porsche clan, his cousins were "singing, crocheting and playing the flute," he said.
"He and Wolfgang Porsche were never on the same wavelength, while Hans Peter Porsche has a toy museum and lets himself be photographed with teddy bears," said another source close to the families. "Meanwhile Piech built a car to win Le Mans whether that bankrupted the company or not. For him, the Porsches are a family of small minded people."
After Porsche SE became VW's controlling shareholding, Piech in his role as VW chairman, faced off against his cousin Wolfgang, Porsche SE's chairman and family head, over control of VW. Each side enjoyed an advantage at some point, but Piech ultimately gambled too far when he tried to remove his former protege, Martin Winterkorn, as VW CEO in 2015 and install his wife Ursula as his successor on the VW supervisory board.
For the Porsches, the power grab by Piech was too much and Piech was forced to give up his post as VW chairman. When the families agreed to replace Piech and his wife on the board with two of his nieces from the Piech side of the family to maintain balance, he leaked news that he found the two ill-suited for the job and he tried to install his own professional managers onto the board.
Speculation swirled for months over when exactly Piech would exact his revenge on his relatives, then news reports emerged in early February that he had implicated Wolfgang and by extension himself in the diesel scandal. He testified to German prosecutors that he had told key VW board members including his cousin in February 2015, long before the scandal broke, in allegations VW directors promptly denied.
This was the final straw for the Porsche and Piechs, who promptly sought to push him off the Porsche SE board, where he is one of five family members. With Monday’s stake sale, they are rid of a constant thorn in their sides.
When asked at the Geneva auto show by reporters about his cousin implicating him in the diesel scandal a month earlier, Wolfgang Porsche said what many of his relatives were no doubt thinking: "You cannot choose your family."