FERDINAND Piech’s reign over Volkswagen may be coming to an end after the company’s most senior committee this week sided with CEO Martin Winterkorn in a fascinating power struggle with the company chairman.
As we reported earlier, Piech said he was “at a distance” to Winterkorn, a comment that would once have ended the VW Group CEO’s career.
It was still enough to force the firm’s steering committee to meet and issue a statement, but instead of giving Winterkorn his gold watch, the six-man committee praised him as the “best possible” CEO and urged the extension of his contract next year.
Piech himself is a member of that committee, and the statement came after a row with the five other members; three trade unionists, the Prime Minister of Lower Saxony, and his own cousin, Wolfgang Porsche.
Piech’s failure to get his own way shows his grasp on the VW Group has weakened.
A survey of investors showed that, while 65 percent agreed with Piech that Winterkorn should go, 80 percent wanted Piech out as well.
VW insiders say Piech was lucky not to have been deposed over his high-handed attitude to his former friend, who has increased sales by 60 percent in eight years to 10 million; VW will likely take over as the world’s biggest carmaker next year.
Instead, Piech is likely to be given little official power when his term as chairman expires in 2017.
So what does a bunch of politicking between steely eyed German billionaire industrialists mean for us?
First, if Piech does have to step down as chairman at the end of his term (or earlier), VW Group will be in Formula One soon after. Audi has already hired former Ferrari F1 chief Stefano Domenicali and only a personal beef between Piech and Bernie Ecclestone blocks an entry.
Second, Winterkorn and his eventual replacement as CEO (probably Porsche’s Matthias Muller) will pay more attention to criticisms made by Piech, and more importantly the shareholders, so expect more urgency in the development of a new low-cost brand and more focus on radical new drive technologies.
Volkswagen-brand cars will also be made more profitable, so expect the cost-cutting to continue.
And there will be a fresh focus on fixing VW’s woes in America, partly with better new products that may also make it to other markets.