VW fight not over, Germany reports

Round one might have gone to Volkswagen Group Chairman Dr Martin Winterkorn, but the German press is speculating heavily that his position is still not safe.

In spite of the Volkswagen Group’s Supervisory Board Leadership Panel insisting Dr Winterkorn was “the best possible chairman of the board of management for Volkswagen” last week, German media outlets insist thwarted Volkswagen Group Supervisory Board Chairman, Dr Ferdinand Piëch, had more cards to play.

The panel went further, saying it would extend Dr Winterkorn’s contract when it expired in February, 2016.

Germany’s dpa press agency insisted this week that Dr Piëch had not given up on his goal of replacing Dr Winterkorn with either Porsche boss Matthias Müller or Skoda head Winfried Vahland. German television network NDR went further, suggesting Dr Piëch does not feel tied down by the leadership panel’s April 16 decision to offer Dr Winterkorn an extended contract.

Nobody in Germany is flippantly disregarding the NDR story, either, because there is a precedent for this with Dr Piëch. He extended the contract of his immediate successor as Volkswagen Group Chairman and CEO, Bernd Pischetsrieder, in 2006 then forced him from the company him just months later. Pischetsrieder was replaced by Dr Winterkorn.

NDR insisted Dr Piëch was trying to build support within both the Piech and Porsche families to oust Dr Winterkorn at or before the car company’s annual shareholder meeting on May 5.

Pointedly, the Porsche side of the family voted against Dr Piëch on the leadership panel on April 16, as did the representatives from Lower Saxony and the German automotive unions (which each control 20 per cent of Volkswagen’s voting rights). Should Dr Piëch succeed in uniting the Porsche and Piech families behind him, he would control 50.7 percent of the Volkswagen Group’s voting stock.

The 78-year-old Dr Piëch is up against staunch support from Germany’s labour unions, though, who insisted the 67-year-old Dr Winterkorn has their support.

“For us, last week’s decision remains valid,” works council head, Bernd Osterloh, told Germany’s Bild this week, while the office of Lower Saxony premier Stephan Weil said he still supported his decision from April 16.

“The Executive Committee places great importance on the fact that Professor Doctor Winterkorn will pursue his role as Chairman of the Board of Management with the same vigor and success as before, and that he has the full support of the Committee in doing so,” the leadership panel’s statement said.

While it is believed that differences of opinion have simmered at Volkswagen Group board meetings for some time, Dr Piëch openly aired them in a statement to Germany’s Der Spiegel recently, saying “there is a distance between me and Winterkorn”.

He had become concerned at Volkswagen’s failure to hit its sales targets in the United States and about the brand’s shrinking profit margins, despite its volumes almost toppling Toyota for global sales leadership last year.