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Piech Is 'Holding Volkswagen to Ransom'

Volkswagen's mighty supervisory board chairman Ferdinand Piech, 71, is hurting his company with his bitter power struggle against Porsche, which plans to take over the group, say media commentators.

Ferdinand Piech, the supervisory board chairman of Volkswagen, has been credited with turning Europe's largest carmaker around in the 1990s when he was its chief executive. But media commentators say he is now damaging the group by engaging in a power struggle with the group's largest shareholder Porsche.

Porsche, which plans to increase its stake to a majority, is owned by the Porsche and Piech families and the dispute over control of VW, which came to a head at a supervisory meeting last Friday, is dangerous because it's a family dispute, which makes it harder to resolve than ordinary management bust-ups, say media commentators.

By failing to show up to the supervisory board meeting and abstaining in absentia in a key vote, Piech sided with VW's labor representatives against Porsche in a bid to ensure that the VW supervisory board will remain the key power base in the group.

Commentators accuse Piech of holding the company to ransom just because he doesn't like Porsche CEO Wendelin Wiedeking, who made mistakes with his excessively dictatorial approach at VW, which is much larger than Porsche.

Business daily Handelsblatt writes:

"The most spectacular takeover in Germany post-war history is at risk of failing due to a family row. This could lead to a standoff that would paralyze Europe's largest carmaker."

"Wolfgang Porsche, the supervisory board chairman at Porsche, must no longer tolerate the escapades of his cousin Piech."

"Piech has been undermining Porsche's seizure of power in Wofsburg for the past year. In his eyes, Porsche CEO Wendelin Wiedeking was too brash in his actions and didn't take enough account of VW's labor representatives in his decision-making. Piech wants Wiedeking's head even though he was only doing what the owners had told him to do: to untangle the sleaze of Wolfsburg with its manifold ties among managers, union representatives and politicians."

"That doesn't bother Piech. By abstaining during the VW supervisory board meeting on Friday he has positioned himself against the family. He fired into his own hunting party. And he mainly hit Wolfgang Porsche and Porsche CEO Wendelin Wiedeking."

"The elitist families that own the sports car manufacturer have fallen into a trap that has ruined many a small family business: a family feud. That's more dangerous than any management board dispute because irrational motives play a part -- and you can't fire your relatives."

"Toyota chief Katsuaki Watanabe will be happy about this dispute. As long as the Porsche/Piech families are busy rowing amongst each other, their aim to catch up with Toyota isn't worth the paper it's written on."

Business daily Financial Times Deutschland writes:

"The power struggle between the heads of the two companies has escalated to such an extent that it can only be explained by personal aversion. The two sides are making the planned takeover of VW by Porsche more difficult and are thereby damaging themselves. Investors are asking themselves if Europe's biggest carmaker should be in the hands of a warring family business."

"Against this background it's understandable that the Porsche and Piech families that own Porsche are now trying to topple the VW supervisory board chairman. The old tactician Ferdinand Piech has gone too far with his last action."

"Piech is evidently intent on securing a personal power base for himself in Wolfsburg ahead of the takeover so that he can remain the key player in all future decisions. Such egomaniac behavior cannot be in the interests of a future unified company."

"But it's unlikely to be easy to get rid of the streetwise Piech. The Porsche representatives must try to convince the second-largest shareholder in VW, the state of Lower Saxony, that Piech has to go."

"Lower Saxony's prime minister Christian Wulff is regarded as a critic of Piech, so it can't be ruled out that he might side with the Porsche representatives. But he's likely to be aware how risky it is to provoke the ire of the mighty supervisory board chairman."

Center-left Süddeutsche Zeitung writes:

"Wiedeking made mistakes when he marched into Wolfsburg and he was clumsy in his dealings with the workforce. The Porsche owners would have good reason to throw him out for that. But Piech's behavior is worse. The VW patriarch is escalating a conflict in which he should be acting as a mediator."

"Piech is holding an entire company with 330,000 employees to ransom just because he doesn't like the behavior of one manager."

David Crossland, 2 p.m. CET