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Ferdinand Piech resigns as chairman of Volkswagen

Ferdinand Piech resigns as chairman of Volkswagen
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Ferdinand Piech has resigned as chairman of Volkswagen after going public in a row with his chief executive, Martin Winterkorn – a one-time ally.

Machavellian machinations or a much needed change in the future direction for one of the world’s most successful car makers?

“The mutual trust that is needed for successful cooperation no longer exists,” the company’s supervisory board’s statement said.

The Austrian could have been born with petrol in his blood. His uncle and cousin, Ferdinand and Ferry Porsche founded and grew the high-performance sports car company. It was there Piech started his career.

He was also involved in Formula One and developed engines for several Porsche’s before leaving to join Audi. In 1993 he moved to Volkswagen. The company was three weeks from bankruptcy.

He and his cousin Wolfgang Porsche are the main shareholders controlling 51 percent of the voting stock.

“Now everyone is caught in a power vacuum and in the coming years a new power structure will have to evolve. At the moment nobody knows how this will turn out. But there will certainly be a balance of power without the strong position in the frontline of Piech. We will have to wait and see if he will be an “eminence grise” and operate in the background or if he will possibly withdraw completely,” explained Stefan Bratzel an industry expert.

The row with Winterkorn was described as “rancorous”. The former VW chairman had a reputation as an aggressive and demanding manager with a prolific record for firing subordinates. Winterkorn has proved to be an executive too far. Shares jumped almost five percent on the news.

In 2014 Volkswagen was the world’s second-biggest car maker by sales behind Toyota and ahead of General Motors but profit margins are below the company’s rivals.

The most pressing priority is to replace the chairman. Next week the new chief has to present the group’s future plans to shareholders at the annual assembly.

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