Former VW chief looks to unload his stake
BADEN-BADEN, GERMANY: Ferdinand Piech, the scion of an automaking dynasty who dominated Volkswagen AG for two decades, is trying to sell his substantial stake in the company to members of his extended family, which could create uncertainty in the aftermath of the carmaker’s diesel deception.
Piech, a former chief executive and supervisory board chairman at Volkswagen, was often a source of discord among the quarrelsome Piech and Porsche clans, which own more than 50% of Volkswagen’s voting shares.
His exit might make it easier for them to push through changes needed for Volkswagen to recover from an emissions deception that weighs heavily on the company.
The tight control has led to criticism that the family has been too slow to make the changes in management and company culture that are needed to move beyond the scandal.
Most of the rest of Volkswagen’s shares are owned by the German state of Lower Saxony and the sovereign wealth fund of Qatar, which tend to side with the family.
But implicit in the disclosure on Friday by Porsche Automobil Holding SE, the holding company for the family’s combined stake, was that Piech could sell his stake of about 15%, valued at €1.1 billion ($1.2 billion), to an outsider if he could not agree on terms with his relatives.
That would deprive the family of a majority and create uncertainty about the company’s direction.
“I expect that the family will not be able to raise the purchase price and that outside investors — for example from China — would come in,” Ferdinand Dudenhoffer, a professor at the University of DuisburgEssen, said in an email. “The Chinese would not pass up such a chance.”
Wolfgang Porsche, a spokesman for Porsche family members, has told German news media that the relatives will be willing to buy the stake.
And even if they were unable to, he said in comments confirmed on Friday by a spokesman for Porsche Automobil Holding, the family would not have a problem with a new outside shareholder.
Word that Piech may sell his stake comes after a tumultuous week for Volkswagen that showed how much the emissions scandal continues to damage the company’s reputation.
Last Wednesday, German investigators searched offices of the Audi unit and of the law firm that has been conducting an internal investigation to determine who is responsible for the scandal.
Jones Day, the law firm, was hired by the Volkswagen supervisory board, which is dominated by members of the Porsche and Piech families or their allies.
During his long career at Volkswagen, Piech, 79, is credited with turning the Audi division into a luxury brand and rescuing Volkswagen from near bankruptcy in the early 1990s.
A grandson of Ferdinand Porsche, the automotive pioneer who designed the Volkswagen Beetle, Piech was a formidable engineer and an iron-willed manager. After becoming chief executive of Volkswagen in 2003, he improved the quality and design of Volkswagen vehicles and made the company the largest carmaker in Europe by far.
But he was also often criticised for his authoritarian leadership style and blamed for creating the win-at-all-costs company culture that fostered the emissions cheating.
Piech became chairman of Volkswagen’s supervisory board in 2002. He was forced out in 2015, only a few months before US regulators accused the company of manipulating engine software to conceal excess emissions by Volkswagen diesel vehicles.
Since then, he has kept a low public profile. And despite remaining a major shareholder, he has had no discernible influence over management.