Former Volkswagen Chairman Ferdinand Piëch will sell the majority of his shares in Porsche SE, the holding company of German carmaker Volkswagen. The move will draw a line under months of infighting among the members of a powerful family clan that has shaped the German car industry like no other.
In a statement on Monday, Porsche SE said that the families Porsche and Piëch, who together control 52.2 percent of Volkswagen’s voting rights, have decided to buy the majority of Mr. Piëch’s shares, who currently holds 14.7 percent of Porsche SE.
Following the agreement, Mr. Piëch’s shares, estimated to be worth €1 billion ($1.06 billion), will be reduced to 1 percent of the holding company. The families declined to provide financial details on the precise amount the shares were bought for.
Mr. Piëch’s departure marks a tipping point in a long-lasting conflict between the former VW chairman and the other members of his family, VW supervisory board members and the carmaker’s workers.
Following two decades at the helm and as a member of the supervisory board of the German automaker, Mr. Piëch will no longer influence the course of Volkswagen.
Ferdinand Piëch, who will turn 80 in a few weeks, in the past had increasingly distanced himself from his family and former companions.
For the family clan, it was crucial to maintain control over the shares and preserve Volkswagen from any outside influence. Monday’s announcement was greeted with a sigh of relief at Volkswagen’s Wolfsburg headquarters, with a spokesman saying the decision ensured “clarity and continuity.”
Ferdinand Piëch, who will turn 80 in a few weeks, in the past had increasingly distanced himself from his family and former companions. Disputes arose exactly two years ago, when Mr. Piëch publicly withdrew support for VW’s former chief executive Martin Winterkorn by saying he had “distanced himself” from the CEO.
But Mr. Piëch lost the ensuing supervisory board battle over Mr. Winterkorn’s role at the company when worker representatives and the public shareholder of the state of Lower Saxony voted in support of Mr. Winterkorn. Mr. Piëch’s cousin, Wolfgang Porsche, urged Ferdinand Piëch and his wife Ursula to step down from the board.
But Mr. Piëch continued to push buttons at the company. After Volkswagen suffered the worst crisis in its post-war history as a result of the revelations over rigged emissions results in its diesel cars, Mr. Piëch angered company executives with his very own version of the scandal.
He reportedly accused his cousin and Porsche SE supervisory board chairman Wolfgang Porsche, VW work’s council head Bernd Osterloh and the premier of the state of Lower Saxony, Stephan Weil, of having had direct knowledge of the scandal.
Mr. Piëch’s allegations, supposedly made to a prosecutor, haven’t been proven until this day, as neither the prosecutor’s office nor U.S. law firm Jones Day, hired to conduct an internal investigation, have released their reports. But it was enough to fully poison the relationship between Mr. Piëch and the other VW supervisory board members, as well as his own family.
Mr. Piëch’s exit could shift the power balance within the family, with the Porsche clan potentially gaining influence. But while the infighting played a major role within the generation of Ferdinand Piëch and his cousin Wolfgang Porsche, it seems less relevant to the younger members of the family.
The “friend or foe” dynamic was no longer relevant among the great-grandchildren of Mr. Piëch, a person familiar with the matter said. The representatives of the so-called fourth generation had decided to bury the hatchet. “The last name of someone no longer is relevant,” the person said. While infighting among the third generation has attracted unwanted media attention, the younger family members wanted to avoid any public outbursts, the person added.
The fourth generation, including Daniell Porsche, Julia Kuhn-Piëch and Louise Kiesling are already members of the Volkswagen Group’s supervisory boards. But power will remain concentrated within Porsche SE, the holding company founded in 2007 as part of the takeover battle of Volkswagen.
Porsche SE controlled 30.9 percent at that point and announced its intentions to grow its holding share to 51 percent. While Porsche SE originally had even more ambitious plans for the control of VW, it had to abandon its goals due to financial woes in 2009, which saw it at the brink of bankruptcy. It has since maintained more than a 50-percent share.
The family will next come together for Volkswagen’s annual general meeting on May 30. Ferdinand Piëch will attend a supervisory board meeting one last time and then leave upon the completion of his share sell-off. Volkswagen will then be set for a new era.
Markus Fasse currently specializes in aviation and automobile industry news. Stefan Menzel writes about the auto industry focusing on Volkswagen. Martin-Werner Buchenau reports from Stuttgart as Handelsblatt’s Baden-Württemberg correspondent. To contact the authors: firstname.lastname@example.org, email@example.com, firstname.lastname@example.org