Porsche and VW: handbags at dawn

Newswheel staff :: 17 October 2005 :: Filed under Porsche, Volkswagen, Europe & UK, US

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The honeymoon is over

It’s been all of three weeks since Porsche bagged a large minority stake in VW. Now battle has been truly joined. The two German automakers were already slapping each other up over the role of Ferdinand Piech. Now VW wants to prevent Porsche from having any representation on the VW board, along with a raft of other anti-Porsche measures. Ladies, please!

Of course, for VW’s management, it must have been rather humiliating to be “bought” by a pint-sized fellow countryman. Humiliating enough, it seems for VW and Christian Wulff (state premier of Lower Saxony, Germany, now the second largest shareholder in VW after Porsche) to drop a pile of cash with US investment bank JPMorgan in return for cooking up a report recommending a range of anti-Porsche measures. Firstly, it reiterates that Ferdinand Piech (former VW supremo and big time shareholder in Porsche) should step down as chairman from VW’s supervisory board. It then adds that Porsche should be prevented from exercising its right to two non-executive directorships on the VW board; that restrictions should be placed on whom Porsche can sell its recently acquired stake in VW to; that VW should the have unilateral right to cancel any co-operation agreement if Porsche breaks any part of it; that…oh, a load of other transparently bad tempered anti-Porsche stuff.

According to the Financial Times, Porsche insiders are describing the report as “laughable.” Given the fact that it would take 80 per cent of the attendees at an extraordinary VW shareholder meeting to remove Mr Piech, that Porsche holds 18.5 per cent of VW and that you never get 100 per cent turn-outs at share holder meetings, you can see Porsche’s point. Overall and with Porsche’s rude health and VW’s sickly stature in mind, we know who we’d rather see calling the shots at VW…

Linkage:
FT story