VOLKSWAGEN scion

From kids to cars

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Stephan Piëch's father Hans-Michel, right, poses as a child with the family car. Literally. Source: Porsche

A children’s television channel is not where you’d expect to find a scion of the family that put German cars on the map. But Stephan Piëch, a descendant of VW Beetle designer and all-round auto legend Ferdinand Porsche, has so far spurned the executive suites of Germany’s car industry in favor of Your Family Entertainment. It’s a neat little company, broadcasting cartoons, adventure films, fairy tales and radio plays.

Mr. Piëch founded the company, and has a 69 percent stake. He says the firm was ultimately driven by a wish to do something positive for children. The channel is like a “well-manufactured wooden toy,” he says. Advertising is carefully selected. “We don’t want products that make kids fat or stupid,” says the founder. YFE, which is listed and has a value of €18 million ($21.5 million), has no problem filling its slots: It makes a tidy profit for shareholders.

But profits aside, what is the most prominent of the fourth generation of the founding families of Porsche and Volkswagen doing in kids’ TV?

Senior family members believe the newcomers will need years to grow into the role.

The Austrian Porsche and Piëch families both descend from the great Ferdinand, and now control more than half of the Volkswagen Group’s stock through their company Porsche Automobil Holding. Stephan’s father, Hans Michel Piëch, is a member of VW’s supervisory board, and now the most senior family member at VW following the resignation of his controversial brother, the patriarchal Ferdinand Piëch. Dynastic succession may seem archaic, but it has real significance for the world’s largest car company. So if YFE’s 47-year-old boss goes on to become de facto head of the clan, he could wield significant power.

So far, Mr. Piëch’s only official position is as a member of the supervisory board of VW’s Spanish subsidiary Seat. But this may change as power passes from the third generation to the fourth, handed on concretely in the form of stock and company positions. Although there is no shortage of great-grandchildren in the clan (there are 30 in total), in practice very few will be entrusted with leading positions.

But Mr. Piëch is gathering the corporate experience to assume that role; his father’s massive block of VW shares would undoubtedly also smooth his path. But how would he handle the responsibility? His father’s outlook, and his interest in media, give an indication. “We’re different, and we understand our family role differently,” Hans Michel once said. “Our managers make suggestions. If they’re plausible, we follow them, and don’t interfere in operations.”

Until the 1970s, there were Porsches and Piëchs in operations management and creative design positions within the family companies. But to prevent feuding among the clan, family members are now discouraged from directly entering the family business.

Since then, they have only held memberships on supervisory boards within the VW Group, although at times they did so in autocratic style, as with Mr. Piëch’s uncle Ferdinand. This was typified by the towering figure of Ferdinand Piëch, who was forced to resign as chairman of VW in 2015 after losing a titanic power struggle with then CEO Martin Winterkorn.

The rules meant that a career in the family business was a non-starter for Stephan. Instead, he studied business and film studies in Scotland, going on to earn a doctorate with a “communications theoretical analysis of the film industry.” But he is not a complete outsider to the auto world. In the past, the YFE boss has been an amateur rally driver, and served internships with Hyundai, Chrysler and Mitsubishi, as well as one at the French offices of Porsche.

Even so, the youngest Porsches and Piëchs are far removed from the engineering roots of their genius forebear. But they also lack the egos that marked the previous generation, and as the torch passes to a new generation, VW may continue to become a more modern, less autocratic organization.

Senior family members, however, believe the newcomers will need years to grow into the role. It is hoped that role will focus on good corporate control and provide “fundamental impetus” for the company, along the lines of BMW’s Quandt/Klatten family owners.

So will Mr. Piëch be up to the job? It seems unlikely he will be able to transfer much strategic insight from children’s television to the automotive industry. Your Family Entertainment has no financial investors and shareholders of the kind he will encounter at the Volkswagen Group. “With us, it’s mostly about impact investing: stockholders who want use their ownership to achieve a positive impact on society,” he says.

That’s not likely to be high on the agenda if Mr. Piëch takes a leadership position on the VW board.

 

A version of this article was originally published in the business weekly Wirtschaftswoche, a sister publication of Handelsblatt. To contact the authors: martin.seiwert@wiwo.de, peter.steinkirchner@wiwo.de

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