Porsche merged into Volkswagen
July 24, 2009 by David Twomey
German sports car maker, Porsche, will be merged into the Volkswagen group of companies following an all-night board meeting that sealed the fate of the company.
Volkswagen chairman Ferdinand Piech tightened his grip over Porsche on Thursday after the company’s chief executive was ousted following a power struggle to keep Porsche independent.
Porsche’s board, of which Mr Piech is a member, axed Wendelin Wiedeking in the early hours of Thursday morning, removing a key obstacle to the sale of Porsche’s sports car business to VW.
Porsche abandoned an audacious takeover attempt of Volkswagen after it ran up more than 10-billion euros (US$14-billion) in debt.
The Stuttgart-based company was instead forced to negotiate a merger with VW but repeatedly clashed with Volkswagen’s chairman about the terms of such a deal.
“Together, Volkswagen and Porsche have all it takes to occupy a leading position in the international automotive industry,” Mr Piech said in a statement.
Speaking in Stuttgart, Dr. Wolfgang Porsche, the company chairman and Mr Piech’s cousin, emphasized that today’s resolutions represented a landmark decision and a milestone achievement for the future.
He added: “Porsche will preserve the myth and identity of the Porsche brand in the integrated group. That brings new prospects for growth.”
Reuters Newsagency says the Porsche board also proposed raising five-billion euros in equity to prepare for the integration process. The Arab state of Qatar will also take a 17 per cent holding in the merged companies as part of the deal.
Mr Wiedeking’s ouster marks a crucial step toward adding a tenth brand to an automotive empire built by Mr Piech that includes low-end, mass-market and luxury carmakers as well as trucks, and holds the VW, Bentley, Bugatti, Skoda, Audi and Scania brands.
Reuters says Mr Piech’s career might then eclipse that of his illustrious grandfather Ferdinand Porsche, who founded Porsche and designed the original VW Beetle.
The deal still requires negotiation, but Mr Piech looks set to dictate the terms for creating an “integrated” company.
Getting hold of Porsche would also mark a return of Piech’s management influence at Porsche, where he spent nine years of his career before quitting as board member for research and production in 1971.
Although Mr Piech’s aspirations for leading Porsche were dashed in the 1970’s, he went on to hold senior positions at Audi and Mercedes-Benz before rising to become Volkswagen’s chief executive in 1993 and eventually chairman in 2002.
In recent months Mr Piech has stepped up a campaign to assert his influence over Porsche, both as a shareholder himself and as head of Volkswagen, one of Porsche’s most important suppliers.
Porsche is heavily dependent on Volkswagen, which delivers or assembles components for a third of all Porsche cars, including the body and engine for the four-door Panamera and Cayenne luxury off-road models.
Under Mr Piech VW bought the Bentley, Bugatti and Lamborghini brands in a single year.
No tags for this post.
So what, Volkswagen is buying Porsche now? What the devil?
Alot of movment in the global top 10 car makers. I wonder were they fall after the dust settles. Is GM even in the top ten anymore?
I think it’s not a new issue anymore…we’ve been hearing about this a month ago. I don’t think it’s a problem, as long as they continue producing quality cars…
VW and Porsche have been tight siblings for eternity so not much is really new. At any rate, perhaps VW can teach Porshe how to stop making fugly 4WDs… but then again you could not really rely on VW to come up with any inspiring designs either…ho hum.
combine the brands: Porsche-Vagen haha! jokes…
I don’t see a problem with this. The two companies have been working very closely for a long time, this won’t change anything unless VW decides to milk Porsche for what it’s worth with stuff like a hatchback with a Porsche badge. For what it’s worth they haven’t diluted the brand values of either Bugatti, Lambo or Bentley since taking over. In fact they’re more desirable today then the day VW bought them.
However I don’t think this will stop ugly big SUV’s from either VW or Porsche. Both the Touraeg and Cayenne remain hideous after all these years. Though on the compact SUV sector, the Tiguan looks quite nice. Where’s the Porsche Roxster?
Wind the clock back to 1948. The first Porsche was made on a Volkswagen platform and the first Volkswagen was made to a design that Hitler stole from Tatra’s Hans Ledwinka. And so were the next 20 million or so, as well as every rear-engined Porsche so far.
All that the latest charade is doing is keeping it in the family.
All your Porscheophiles out there, just remember that the H-man is the father of your 911.
Captain Mainwaring: umm, ok.
As Nobody says, VW have been excellent brand managers so far and that will surely continue with Porsche. Car nuts like us know that the Golf and A3 share a platform, but does the general public know or care?
Just imagine the possibilities with the proliferation of technologies across Audi, Bentley, Lambo, Bugatti and now Porsche? I bet they can’t believe their luck. VW’s goal to overtake Toyota will likely be realised much sooner than expected.
Tuff luck, you Porsche pedal pumpers………you’re now Volkswaggon drivers…pffffft !!