German sports carmaker Porsche has conceded defeat in a months-long power struggle with Volkswagen.
Porsche has dumped its embattled boss .. Wendelin Wiedeking clearing the way for the two companies to merge over the next couple of years. Wiedeking had tried to take over VW by borrowing billions to buy shares but he over reached and now is out, his plans reversed. For Porsche to buy VW would have been an extraordinary move. It is tiny by comparison with turnover of seven billion euros against VW’s 114 billion last year. It made 87,000 cars while VW turned out 6.3 million and Porsche is worth 3.6 billion euros to VW 70 billion. Porsche’s Chairman, Wolfgang Porsche, wept as he told a members of the company’s trade union works council about the changes. He said: “Dr. Wiedeking’s merits are indisputable. He has led Porsche out of misery to new heights that were previously unthinkable.” Indeed when Wiedeking took on the top job at Porsche nearly 17 years ago it was all but bankrupt, he streamlined production and now it has the highest profit margins in the car industry. The reward – he was the best paid boss in Germany, earning 77 million euros last year. Preparing for the merger and to cut Porsche’s 10 billion euros of debt the Gulf State of Qatar will make a major investment in the sports car firm.