FRANKFURT--An era at one of Europe's biggest corporations ended
dramatically Saturday when Ferdinand Piech, chairman of Volkswagen
AG and grandson of the company's founder, unexpectedly resigned
after losing a rancorous battle to oust Chief Executive Martin
Winterkorn.
Mr. Piech has dominated Volkswagen for decades, steering the
company's rise to become a global automotive group with more than
600,000 employees that is poised to overtake Toyota Motor Corp. and
General Motors Co. as the world's biggest auto maker by sales.
In his latest move he tried to oust the company's embattled CEO
for misreading global markets and costing Volkswagen precious
momentum in its heated competition with Toyota and GM. But his
attack failed, abruptly ending one of corporate Germany's most
storied careers and opening the door for sweeping management
change.
"Piech's departure represents a seismic shift in Volkswagen's
power structure, and could foretell drastic changes in how one of
the world's largest auto makers operates," said Karl Brauer, an
automotive analyst at research group Kelly Blue Book.
Mr. Piech tendered his resignation after the executive committee
of Volkswagen's supervisory board met in Braunschweig, near the
company's headquarters, and concluded that the board could no
longer work together with Mr. Piech.
"The mutual trust that is needed for successful cooperation no
longer exists," Volkswagen's supervisory board said in a
statement.
Berthold Huber, deputy chairman of the committee and former head
of the IG Metall trade union, will assume Mr. Piech's duties until
a new chairman is elected. That could take place as soon as May 5
at the next annual shareholder's meeting.
Mr. Piech and his cousin, Wolfgang Porsche, are the company's
main shareholders, controlling 51% of the voting stock through
their family investment company Porsche Automobil Holding SE. Mr.
Piech will remain on the board of the family holding company.
But Mr. Porsche may emerge stronger as his cousin's star fades.
Shortly after Volkswagen announced Mr. Piech's resignation, Mr.
Porsche issued a statement backing Volkswagen's management and
expressing regret for the crisis unleashed by Mr. Piech's efforts
to undermine the CEO.
"We have complete confidence in the management of Volkswagen AG
and regret the developments of the past few days," said Mr.
Porsche, adding that Porsche SE would continue demonstrate "great
loyalty" as Volkswagen's anchor shareholder.
Mr. Piech wrote in his memoir "Auto Biography" that Volkswagen
was just three months away from insolvency when he became CEO in
1993. In the nine years that followed he modernized the company's
manufacturing processes, acquired new brands, and laid the
foundation for Volkswagen's global rise.
Volkswagen now has nine separate car brands and sold 10.2
million vehicles last year, generating EUR202 billion ($219.6
billion) in revenue. But Volkswagen lags behind its competition in
profitability. The company's namesake VW brand is struggling in the
United States, Brazil and other key markets. In China, the
company's biggest source of profits, sales fell in the first
quarter.
"There is no guarantee that 2015 is going to be a successful
year," Christian Klingler, a Volkswagen board member who is in
charge of global sales and marketing, warned recently when the
company released sales figures for the first three months of the
year.
Mr. Piech is known for quickly getting rid of executives that
have lost his favor. In 2006, Mr. Piech pulled the rug out from
Volkswagen CEO Bernd Pischetsrieder by stating in an interview with
The Wall Street Journal that the CEO's future was uncertain. Mr.
Pieschetsrieder was replaced in 2007 with Martin Winterkorn, a
protege of Mr. Piech and then CEO of Volkswagen's luxury car brand
Audi AG
When Mr. Piech moved against Mr. Pischetsrieder in 2006 he had
the backing of Bernd Osterloh, the powerful head of Volkswagen's
works council. But when Mr. Piech put Mr. Winterkorn in his cross
hairs, Mr. Osterloh and other labor leaders rushed to defend the
CEO.
"The last two weeks have created uncertainty in the minds of the
workforce," said Berthold Huber, acting chairman and former head of
the IG Metall trade union. "This uncertainty had to be ended
today."
Write to William Boston at william.boston@wsj.com and Todd Buell
at todd.buell@wsj.com
(Corrections & Amplifications--This article was corrected
April 26, 2015 at 1923 GMT to reflect that Bernd Pischetsrieder is
Volkswagen's former chief executive. The original version of this
article incorrectly spelled his last name as Pieschetsrieder in the
14th and 15th paragraphs.)
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