The Porsche Story A Fierce Family Feud
Volkswagen looks set to acquire Porsche, the troubled German sports car manufacturer. At the core of the companies' tightly intertwined histories is a deeply divided family engaged in a power struggle worth billions -- and which could determine the fate of two of Germany's most famous carmakers.
This is part one of SPIEGEL's history of Porsche and Volkswagen and the troubled relations between the Porsche and Piëch families. You can read part two here.
In the end, the two men shook hands after all. When Ferdinand Piëch encountered his rival Wendelin Wiedeking last Thursday evening at an event to celebrate the 100-year anniversary of Audi, they greeted each other briefly.
The battle had been decided. Piëch had fought hard, as he enjoys doing when something really important is at stake. "Either I'm shot dead, or I win," he says.
This time he had faced a formidable foe: Wendelin Wiedeking, the man who had saved Porsche and then, in the style of a true turbo-capitalist, had tried to take over the much larger Volkswagen Group. With an annual compensation of about 80 million ($112 million), he was Germany's highest-paid corporate executive -- and one of its most controversial. "For many people, I am a nightmare," Wiedeking says about himself.
time for Wiedeking to go and Porsche production chief Michael Macht to take his place. The Porsche brand will be absorbed by the VW Group, in which the emirate of Qatar would then also purchase a stake. But the next set of conflicts is already taking shape.
Wiedeking himself is leading the fight for his severance package. At issue is a sum in excess of 100 million ($140 million), an amount that will catapult the debate over executive compensation in Germany into a new dimension. It will likely be the largest golden parachute in the history of German business. Ironically, it will be paid to the manager who, despite having saved Porsche, has since maneuvered it into a crisis that almost bankrupted the luxury carmaker.
In this discussion, some of the things the Porsche boss has said in the past may come back to haunt him, including the statement: "You can assume that I won't be going to the poorhouse."
A Dynastic Feud
Another ongoing conflict will also continue, namely that between the Porsche and Piëch families. Wiedeking was merely a proxy in a dynastic feud of a kind that has rarely been seen in German industry.
On one side of this conflict is the Porsche family, led by Wolfgang Porsche, an amiable businessman who was always in the shadow of his father, engineer Ferry Porsche, and his brother Ferdinand Porsche, and who only assumed the chairmanship of the Porsche supervisory board at the age of 63. He is normally the kind of man who prefers reconciliation whenever possible. He likes to defuse tense situations by telling jokes. Wiedeking was among those who fought on his behalf.
Graphic: Porsche and VW ownership structures.
Until now, it was always an unevenly matched battle, from which Piëch usually emerged victorious.
The Porsches employed a pinprick strategy. They once characterized the Piëchs as the "rival family." And yet the only reason their surnames are different was that the progenitor of the clan, Ferdinand Porsche, had a son, Ferry, and a daughter, Louise. As a result, Ferry Porsche's children ended up with the mythical surname Porsche, while Louise's children acquired her husband's surname, Piëch.
Whenever Wolfgang Porsche wants to annoy his cousin, he refers to him as a "non-namebearer."
The psychological games and foibles of this industrial dynasty would be little more than laughable, if only they had remained a family matter. But the rivals are now battling over who is to control their combined assets, which in the future will include more than half of a merged VW-Porsche Group. The new organization will employ 370,000 people and aims to become the world's largest carmaker. At the same time, it will encompass two symbols of German industrial history that are burdened with particularly strong emotions.
On the one side is the Volkswagen Group, with its Beetle, which Hitler planned as the "people's car" and which later became a symbol of Germany's post-war Wirtschaftswunder ("economic miracle"). On the other side is Porsche, with its 911, revered worldwide as the quintessential sports car and a pinnacle of German engineering achievement. The myth of the Porsche brand was even enhanced by a horrific accident: the death of the actor James Dean in 1955, who was driving a Porsche when he died.
American comedian Jerry Seinfeld, who collects Porsches, is apt to lose his sense of humor the minute someone drops so much as a crumb in one of the more than 20 cars in his collection. A Porsche always makes you feel "like you're in the future," he says. VW, on the other hand, represents the somewhat more mundane present.
The two brands could hardly be more unlike. Porsche sells dreams, while Volkswagen sells reality. Porsche is the glossy icon of exclusivity while Volkswagen represents the sturdy, reliable vehicle of the masses. Luxury versus affordability, the moneyed elite versus the new middle class, golf aficionados versus "Generation Golf," as those who grew up in West Germany in the 1980s have been dubbed. And all of this is to be united under one roof in the future, and run by two deeply divided branches of the same family?