Porsche vs Piëch

Lifestyles of the rich and feuding

The ongoing family feud between the billionaire families behind Porsche and VW are older than this vintage sports car. Source: DDP

A fight in the family is best kept in the family. That’s why it was somewhat surprising when, at a car show in March, Wolfgang Porsche, chairman of the eponymous carmaker’s board, spoke badly of his cousin, Ferdinand Piëch, former head of Volkswagen.

“You can’t choose your family,” the 74-year-old billionaire said of his 80-year-old billionaire cousin.

This familial relationship has been troubled for some time and everyone knows it. But the negative sentiments haven’t usually been so public. It seemed like that was the open airing of family feuds ended there: After the remarks, Mr. Porsche refrained from making further comments about Mr. Piëch, who announced his resignation from the family business in April. But that all changed this weekend.

Mr. Porsche revealed the Porsches had considered adopting Mr. Piëch because they worried about him not bearing the company name, like they did.

The family business is Porsche, the sports car company, as well as automotive behemoth Volkswagen, in which the Porsche family has majority voting rights. Mr. Piëch, an engineer, is generally considered to have brought VW and subsidiary Audi into the 21st century, but left VW in 2015 after a power struggle with then-chief executive, Martin Winterkorn. He was later involved in VW’s Dieselgate emissions scandal, telling prosecutors that he had pointed out problems with VW’s emissions before the company admitted knowing about it. His testimony suggested that other executives were lying.

To many it seemed that Mr. Piëch’s retirement from the business might put an end to all the sniping. He is selling his 14.7 percent of Porsche shares for around €1 billion to his brother, Hans-Michel, who will become the Piëch family representative on the Porsche board. And he attended his last board meeting, last Monday.

But that hasn’t stopped Mr. Porsche, who openly criticized his older cousin again over the weekend, according to German newspaper Frankfurter Allgemeine Zeitung on Sunday.

The latest nastiness comes after the screening of a documentary on German television, “Germany’s Biggest Clans – The VW Story.” The rivalry between the two auto industry tribes – one which carried the car company’s vaunted name, and the other which did not, as the TV show put it – permeates the businesses’ history. Every incident, from divorce to betrayal and intrigue, and each tit-for-tat statement is gleefully reported by the German press as if it were Hollywood scandal. And over the weekend, Mr. Porsche was fanning those flames once again.

Hauptversammlung VW
Not exactly kissing cousins: Ferdinand Piëch (left) and Wolfgang Porsche, on better terms at a board meeting in 2014. Source: DPA

In the documentary, Mr. Porsche revealed that at one stage the Porsches had considered adopting Mr. Piëch because they worried about him not bearing the company name, like they did. An adviser to the family had suggested it as a way to resolve the rivalry, Mr. Porsche said, but the head of the family at that time, his father Ferry Porsche, decided against it.

He said that he had four sons and he didn’t need to adopt another one, Mr. Porsche told the documentary makers.

“Ferdinand Piëch destroyed his own life’s work,” Mr. Porsche went on to say in the documentary, referring to a previous attempt by Porsche to take over the larger VW around 10 years ago. The attempt ended in 2012 with VW taking over the parts of Porsche it didn’t already own. “It was unnecessary. It was outrageous,” Mr. Porsche said of Mr. Piëch’s behavior.

The comments apparently surprised VW management. Insiders say that the latest verbal attacks might stem from a disagreement in February, when Mr. Piëch criticized the whole of the VW board, which clearly includes Mr. Porsche. That cut deep, the insiders say.

Since the beginning of the year, VW board members have been disputing what their former chief, Mr. Piëch, has said, namely that he told the board about the emissions issues far earlier than the board say they found about it. The company, which became the world’s largest carmaker in 2016, has been dealing with that controversy – who knew what, and when did they know about it? – since the emissions scandal first started. An internal investigation refuted Mr. Piëch’s allegations and it seems that Mr. Porsche is happy to follow that up with personal smears, which further put what Mr. Piëch told prosecutors in doubt. If Mr. Porsche is to be believed, Mr. Piëch is doing this out of spite – and maybe because, despite all he did for both companies, he never had the Porsche name.

All the feuding does not seem to be hurting VW, though. In September, the Wolfsburg-based carmaker delivered more vehicles in one month than ever before, with 1.01 million coming off the production lines, adding up to a 6.6 percent increase on last September.

Stefan Menzel covers the auto industry for Handelsblatt. This story was adapted in English for Handelsblatt Global. To contact the author: menzel@handelsblatt.com

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