Volkswagen Group’s Chairman of the Supervisory Board, Ferdinand Piëch, resigned over the weekend, along with his wife, Ursula, whom also left her position on the Supervisory Board. The announcement of Piëch’s resignation came from Volkswagen on April 25th, following Piëch’s failed campaign to block Martin Winterkorn to take over as the VW Group’s next CEO.
Volkswagen’s official statement from April 25th says that Piëch’s immediate resignation came after “The members of the Executive Committee have unanimously determined that in view of the background of the last weeks the mutual trust necessary for successful cooperation no longer exists.”
Deputy Chairman Berthold Hubor will temporarily assume the Chairman position.
Ferdinand Piëch, a grandson of Ferdinand Porsche, the creator of the Volkswagen Beetle, is one of Germany’s most important and influential industry figures. Piëch rose to become the CEO of VW in 1993, while VW was in deep trouble and close to declaring bankruptcy. Piëch is credited with turning the automotive giant’s fate around and shaping the VW Group into what it is today.
Earlier this month, in an interview with Der Spiegel magazine, Piëch proclaimed that he was distancing himself from Martin Winkelhorn, who was widely believed to be next in line to assume the Chairman position on the Supervisory Board. Piëch did not publicly give reasons for distancing himself from his associate. Alarmed by this unexpected comment, the board met twice and on April 16th, Piëch reportedly voiced concerns about the future of the VW Group under Winterkorn. Issues cited include VW’s low profit margins, declining sales in the United States, and the failure to come up with a viable strategy for low-cost vehicles. More importantly, he criticized what he saw as Winterkorn’s overall lack of vision. This was all said despite VW’s record profit year – on-track to dethrone Toyota as the world’s largest automaker.
These sentiments were not echoed by the five other members of the board and they responded to Piëch’s concerns with a statement that called Winterkorn the “best possible CEO for VW” and announced an extension to his contract.
Immediately following the meeting on the 16th, Piëch and Winterkorn began marshaling support for themselves before the next scheduled meeting on the 25th. Piëch’s efforts to rally support for his agenda against Winterkorn came to no avail and when the board met on the 25th, the unanimous decision to support Winterkorn caused Piëch not only to step down from the Chairman position, but to leave the board entirely, taking his wife, Ursula with him.
Regardless of his position on the VW board, Piëch remains a board member of Porsche SE, a holding company which owns 50.7 percent of VW’s common stock. Piëch owns about 13 percent of the holding company and may still be able to exercise his influence.
The announcement caused a shockwave throughout the industry and on Monday, VW’s stock rose as much as 5.1 percent and traded up 4 percent to 242.45 euros.
Piëch served as Volkswagen CEO from 1993 to 2002. He’s credited for turning the company around from the point of extinction and expanding its reach into what the VW Group is today – Skoda, Bugatti and Lamborghini all belong to the giant due to Piëch’s reign.
