The strangest and possibly most significant automotive industry career this side of Henry Ford is about to come to an ignominious end.
Ferdinand Piech, a world-class eccentric but a figure of transcendent importance in the history of cars and car companies, is selling his nearly 15 percent voting stake in the family firm that controls Volkswagen Group. It is the endgame in a bitter family dispute of the kind that has characterized his life and career.
But what a career it has been. Piech, who turns 80 next month, has exercised more power than any auto leader since the end of World War II and is one of the most accomplished pure automotive engineers of any time.
Even at this stage of life, Piech's every move is watched and wondered about. The question is whether the sale of his stake might set off a chain of events that alters the course of the world's largest carmaker.
And exactly why is Piech offloading his stake in a holding company that owns more than half the voting shares in VW, the automaker founded by his grandfather, Beetle designer Ferdinand Porsche? Was it Piech’s choice, or is he being forced by his family to sell?
Relatives say Piech has become increasingly embittered since resigning as chairman of the VW Group supervisory board in April 2015 — a move that pre-empted an ouster led by cousin Wolfgang Porsche, a source close to the families told Automotive News.
The other third- and fourth-generation descendants of Ferdinand Porsche have signaled that they will exercise their right of first refusal for Piech’s stake. That means Piech has little choice but to divest the shares to the same people he has mocked and belittled over the years.
Last straw
The latest dispute with the family grew out of VW’s diesel emissions fiasco. Piech told prosecutors as part of his testimony in a criminal investigation that as head of the supervisory board, he brought word of the impending scandal to the attention of key VW directors in February 2015, including cousin Wolfgang Porsche. That was shortly before he engaged in a losing power struggle with then-CEO Martin Winterkorn and stepped down from the supervisory board.
VW’s management and board angrily dispute that Piech warned them about the crisis, claiming that they along with Winterkorn only became aware of the diesel problem at the start of September 2015.
For family members, Piech’s claim was the final straw, sources say. They hoped to push him off the board of Porsche SE, the Porsche-Piech family holding company that controls VW, where he continued to participate in meetings after relinquishing his VW Group responsibilities.
For years, the family put up with Piech’s domineering arrogance (he famously stole the wife of his cousin Gerd Porsche) since he was the only one who knew anything about running a car company. By directly incriminating his cousin in a criminal investigation, however, it appears that most of his relatives have finally had enough.
Hans Dieter Poetsch, chairman of VW’s supervisory board and CEO of Porsche SE, said he does not know “the reasons or logic why Dr. Piech might be considering it in the first place.”
When speaking to reporters in Stuttgart last week, Poetsch played down speculation that a change in ownership at the holding company ultimately could affect VW Group.
“If it happens, the shareholder structure wouldn’t change materially since the voting shares would remain in the hands of the Porsche and Piech families,” he said. He cited comments from Wolfgang Porsche that he and his relatives would ensure no external investors could get their hands on the nontraded ordinary stock.
Poetsch also denied suspicions that Piech is in poor health, describing him as “fit and lively” at the most recent board meeting, held March 10.
Officials confirm Piech has attended every Porsche SE board meeting since leaving VW Group, indicating he still has an interest in the family business and VW. That was at least until last week, when Porsche SE confirmed the family was in talks to buy Piech’s voting stake.
Who can be sure that Piech is through, even at age 80? He surprised the industry once before with a comeback after a family dispute, albeit that was 46 years ago.
In 1971, the 34-year-old Piech was a dazzling technician who had rejuvenated Porsche’s racing program (he oversaw the first in a long line of Porsche victories at Le Mans), but he had just been ordered out of the family business after nearly bankrupting the company in the process. As Piech and his siblings and cousins squabbled over control of the sports car company, the heads of the clan, Ferry Porsche and Piech’s mother, Louise Piech, abruptly decided that no family member could hold an executive position.
Out of a job, Piech engineered a remarkable career revival. He went to work for Audi, part of a Volkswagen group that was not then under control of the Porsche-Piech clan. Operating outside the family, he became Audi’s revered head of technical development.
Audi’s r&d center in Ingolstadt became a hotbed of technical advances. It’s where the industry’s technology agenda was being set in the late 1970s — in areas from all-wheel drive to aerodynamic styling.
Piech saw technology as the only way to build the Audi brand. It was a brand with aspirations of grandeur, but it seemed to creep along, never building any real momentum until Piech arrived. The company’s slogan “Vorsprung durch Technik” was the personification of Piech — the belief that technology was the answer to all problems in the auto business. Audi was the test bed to prove his theory and the springboard for his ambition.
As much as the ideas themselves, Piech — a 20th century version of the 19th century mechanical geniuses who founded the industry — seemed to love the process of engineering, the rigor and the discipline of taking raw ideas and applying them to production vehicles.
Cult of personality
“He was a great man for solving problems with other people’s ideas,” a VW executive once said. “He knew immediately when he saw a good idea, like Picasso seeing an African mask and making it into art.”
Piech eventually took over as Audi’s CEO and went on to become CEO of VW Group, which under his leadership separated from the pack of Europe’s volume manufacturers.
He was a merciless competitor, making little pretense of collegiality within the industry. Many of his CEO peers said they could not hold a normal conversation with him. Discussions could be punctuated with long stretches of unexplained silence. Inside VW, he commanded loyalty but also was criticized as being an abuser of power, a despot surrounded by yes men. His inscrutability generated fear, and all it took was a single criticism to end the career of a promising VW executive.
But the rough style and idiosyncrasies tended to mask the giant contributions he made to the global auto industry in the second half of the 20th century. Indeed, the contributions went well into the 21st century. In 2002, Piech stepped down as an operating leader but continued to steer VW as chairman. The company’s key acquisitions and deals since then were his doing. Piech was able to acquire the truckmaker Scania, for example, and he convinced Osamu Suzuki to enter into an alliance, even if it didn’t pan out in the end.
Piech was a visionary.
Richard Johnson contributed to this report
