VW Takeover Close as Porsche CEO Resigns
It's the end of an era at the luxury sports carmaker Porsche. The once-mighty Wendelin Wiedeking is stepping down as CEO of Porsche AG.
The news was announced early on Thursday morning after a marathon meeting of the Porsche Automobil Holding supervisory board. Wiedeking and Porsche's chief financial officer, Holger Härter, will be resigning "with immediate effect," Porsche said in a statement. They will also be giving up their positions on the supervisory boards of Volkswagen and Audi. Wiedeking's successor, as reported last week by SPIEGEL, will be Porsche's current head of production, 48-year-old Michael Macht.
Wiedeking turned the luxury Stuttgart-based carmaker around in the 1990s and made it immensely profitable. However the tough-talking CEO's star fell after his bungled attempted takeover of the much larger carmaker Volkswagen, which brought Porsche to the brink of bankruptcy and left it with around €10 billion ($14 billion) in debt. Härter was the architect of the complex financial wizardry behind the Volkswagen takeover bid.
Porsche said in a statement that Wiedeking will receive a severance package of €50 million. Wiedeking, whose contract was to run until 2012, said in a personal statement that half of that money will go to a social foundation. Previous media reports had speculated that Wiedeking, who was one of Germany's best-paid executives, could receive a record golden handshake of up to €250 million. Härter will receive €12.5 million.
Explaining the two executives' decisions to step down, Porsche said that Wiedeking and Härter wanted "to make an important contribution to the pacification of the situation." The news comes after a months-long struggle between Porsche and Volkswagen over the future of the two closely intertwined companies. The bitter fight was also the story of a decades-long feud between the Porsche and Piëch families, who own Porsche Automobil Holding and just over 50 percent of Volkswagen.
The Porsche supervisory board met late on Wednesday evening for a surprise session to discuss the future of the embattled company. The board agreed to seek a capital increase of at least €5 billion, a spokesman said. The board also pledged its support for talks with a Qatar investment fund, agreeing to give the go-ahead for Porsche to sign a deal with the Qatar fund. Negotiations with Qatar, which were Wiedeking's brainchild, have been ongoing. A company spokesman was unable to say if the capital increase would definitely come from Qatar or if additional investors would be involved.
SPIEGEL reported earlier this week that the Porsche and Piëch families had already come to terms over the future of the two companies. Under the plan, Porsche AG will be sold to VW in two stages. VW will initially acquire 49.9 percent of Porsche, and it will purchase the remaining shares at a later date. Porsche would then become the 10th brand in the VW stable, which also includes Audi, Skoda, Seat, Bugatti and other brands. The plan was developed by Ferdinand Piëch, head of the VW supervisory board, who has been involved in a venomous power struggle with Wiedeking in recent months. SPIEGEL also reported that Qatar wanted to wait until a VW-Porsche merger had been completed before investing. The Qatar fund is expected to take a stake of between 14.9 and 19.9 percent in the combined VW-Porsche group.
A decision is expected during the Volkswagen supervisory board meeting on Thursday afternoon. Observers speaking on Thursday morning said a VW takeover of Porsche AG was practically certain.