Volk­swa­gen Chair­man Piech re­signs fol­low­ing CEO dis­pute

The China Post - - BUSINESS - BY DAVID MCHUGH

Fer­di­nand Piech, chair­man of the board of Volk­swa­gen AG and a ma­jor fig­ure in the Ger­man auto in­dus­try, has stepped down af­ter clash­ing with other board mem­bers over his crit­i­cism of the com­pany’s CEO.

Volk­swa­gen said in a state­ment Satur­day that Piech, 78, was resigning with im­me­di­ate ef­fect.

Piech had said in an in­ter­view with Der Spiegel pub­lished ear­lier this month that he was dis­tanc­ing him­self from CEO Martin Win­terkorn.

He did not pub­licly give a rea­son for his re­mark. Volk­swa­gen is prof­itable and saw global sales pass the 10 mil­lion mark last year as it pur­sues its goal of de­thron­ing Ja­pan’s Toy­ota as the world’s largest au­tomaker. But its core Volk­swa­gen brand has strug­gled to hold down costs and to gain mar­ket share in the United States.

Piech’s view on Win­terkorn was re­jected by other mem­bers of the board who said that he had not agreed that stance with them. They pushed back, and the board’s six-mem­ber ex­ec­u­tive com­mit­tee, which in­cludes Piech, is­sued a state­ment April 17 say­ing Win­terkorn, 67, was “the best pos­si­ble” chief ex­ec­u­tive for Volk­swa­gen.

Win­terkorn, CEO since 2007, got sup­port from the head of Volk­swa­gen’s in­flu­en­tial em­ployee coun­cil, while the gover­nor of the state of Lower Sax­ony, a mi­nor­ity share­holder in the com­pany, crit­i­cized the public dis­cus­sion about the com­pany’s lead­er­ship. Piech’s cousin, Wolf­gang Porsche, said Piech’s com­ment rep­re­sented his “pri­vate opin­ion.”

The Piech and Porsche fam­i­lies to­gether con­trol a ma­jor­ity of shares in Volk­swa­gen. Volk­swa­gen said Piech’s wife, Ur­sula, was also resigning from her board seat.

The Volk­swa­gen AG state­ment said that the board’s ex­ec­u­tive com­mit­tee had met and de­cided that “in view of the back­ground of the last weeks the mu­tual trust nec­es­sary for suc­ces­full co­op­er­a­tion does not ex­ist.”

The state­ment said that deputy board chair­man Berthold Hu­ber would serve as in­terim chair­man.

Piech served as Volk­swa­gen CEO from 1993 to 2002, gain­ing credit for turn­ing the com­pany around and ex­pand­ing its reach with new brands such as Czech car maker Skoda at the lower end of the mar­ket and Bent­ley, Bu­gatti and Lam­borgh­ini at the luxury end.

The grand­son of Fer­di­nand Porsche, who founded the sports car com­pany with that name and de­signed the first ver­sion of the VW Bee­tle, Piech has been a ma­jor power bro­ker in the Ger­man auto in­dus­try. He for­merly worked at Porsche and as the head of luxury car­maker Audi, owned by Volk­swa­gen.

At Volk­swa­gen, he was be­hind the re- cre­ation of the 1960sera Bee­tle as the New Bee­tle and launched a luxury model, the Phaeton, which stretched Volk­swa­gen’s brand im­age as a mass-mar­ket car­maker. As VW board chair­man he turned the ta­bles on an at­tempt by Porsche to take over Volk­swa­gen. Porsche wound up over­loaded with debt and it was Volk­swa­gen that took over Porsche and folded it into its sta­ble of brands.

AP

In this Septem­ber, 2013 file photo, chair­man of the board of Volk­swa­gen AG Fer­di­nand Piech vis­its the In­ter­na­tional car show IAA in Frank­furt, Ger­many.

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