Ferdinand Piëch wants to build a legacy by taking personal control of Volkswagen group. In his single-minded style, he has parlayed his family's wealth and control of Porsche (he is the grandson of Porsche founder Ferdinand Porsche) and his position as chairman of the VW supervisory board into an unbeatable position.
The shouting isn't over, but Piëch has won. The coup was brilliant. But the process and the alliances Piëch picked to do it with will make governing his new fiefdom more difficult.
The odd alliance of one of Europe's richest individuals with VW's labor bosses now is even stronger. In getting another pro-labor board member elected this month, Piëch secured another vote. But he undercut the authority of his top managers who had opposed the appointment.
By making Porsche the largest shareholder, Piëch isolated his major opponent on the supervisory board, Christian Wulff, prime minister of Lower Saxony, the German state that was previously the No. 1 shareholder.
Wulff wants Piëch to resign. He says that Piëch has conflicts of interest because he is at once co-owner of VW's largest shareholder, co-owner of its largest independent distributor and the top board member of VW.
Wulff has a point. But Wulff himself also has conflicting interests as head of a major VW shareholder and prime minister of a region dependent on VW jobs.
What Piëch did is a blatant power grab. It's not about what's good for Porsche's non-family shareholders, or what's good for VW and its employees.
But that's not really the problem.
On one level, Piëch's fierce drive could serve VW well. While he was controversial as chairman of VW group, Piëch knew exactly what he wanted to do. Lots of folks disagreed with him, but VW had a clear direction.
Owner and boss
Piëch is a strong leader in an industry where leadership can make a difference. His relentless drive and engineer's perfectionism resulted in better technology and more capable cars. He succeeded in making Audi into a strong competitor to BMW and Mercedes. But ultimately, he also overreached when he tried to make VW premium.
No, the real problem is that Piëch knows no one can thwart his ambition -- as long as he doesn't alienate his labor-union board majority.
As chairman of VW group, he served at the pleasure of the supervisory board. Now he is effectively both owner and boss. Yet VW has deep structural problems. It must cut overhead, but Piëch's board majority represents the highly paid German workers that are the obvious cost-cutting target. And Piëch has weakened current VW group Chairman Bernd Pischetsrieder and VW brand Chairman Wolfgang Bernhard, who must implement any cost-cutting moves. Piëch has engineered a virtual takeover, yet severely limited his own freedom of action.
So has anything really changed? If the board majority keeps ignoring the labor-cost issue and Piëch still focuses on moving upscale, the answer is, No.
E-mail Managing Editor Jesse Snyder at [email protected].