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Old 12th April 2015, 09:14   #1
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Default Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

A new power struggle is reported to be silently brewing in VW AG Headquarters in Wolfsburg. CEO Martin Winterkorn in the past decade has brought a lot of changes to the profitability of the group, including the modular platform-sharing system & acquisition and revival of brands such as Porsche, Scania & Ducati under the group, however plateauing profitability along with little progress in American markets & also slow growth in the heavy-vehicle development has caught the attention of Ferdinand Pich.



Winterkorn (left) and Ferdinand Pich

Mr.Pich the grandson of Ferdinand Porsche, is the Chairman of the VW AG, a mechanical engineer, he has overseen all the development of the group so far & helped in the Bentley, Lamborghini and Bugatti acquisition & rebranding during his tenure as the CEO. Now however politics has said to have entered the top management of the group with Pich flogging the inability of the company to develop a low-cost car as also inability to penetrate other markets with exception to China.

It is said that Martin Winterkorn, whose contract is set to be renewed in 2016, could be the most likely successor to Pich after his retirement. Pich though has quoted that he's keeping himself "at a distance" from the CEO and that the board members in general agree with Winterkorn's inefficiency in marketing. Winterkorn though has replied by saying that he's unaware of any dissent against him.

Its for certain now that change will set upon VW Group after almost 10 years of unquestioned leadership by the CEO, which way they come by is yet to be seen.

Source :http://www.bloomberg.com/news/articl...lkswagen-chief

Last edited by dark.knight : 12th April 2015 at 09:16.
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Old 13th April 2015, 12:49   #2
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Default Winterkorn vs Piech: Discord in VWs leadership

Volkswagen's efforts to become the world’s largest car maker are in full swing. However, while the sales charts have been gaining ground, VW’s upper level management has been engaged in a feud. The Porsche and Piech families that head Volkswagen AG, have been engaged in a battle involving the future of VW CEO Martin Winterkorn, who is defending himself against efforts to oust him.

The reports came in after VW chairman Ferdinand Piech, publicly criticized the CEO and stated his move of distancing himself from Winterkorn. While Piech has expressed his discontent, his cousin and Porsche Chief Wolfgang Porsche, has come out in support of Winterkorn, stating that Ferdinand Piech’s comments are his private opinion. Labour leaders and the state of Lower Saxony - which owns a fifth of VW's voting shares, have also come out in Winterkorn’s support. Porsche, the labour leaders and the state of Lower Saxony hold 14 seats out of 20 on the board, which could effectively prove to keep Winterkorn safe.

Under the CEO’s leadership the group has seen a large level of expansion in both, the number of brands under its belt and the number of production plants worldwide. The Volkswagen group is now on its way to beat Toyota and General Motors as the world’s largest car maker by sales. The achievement could be seen as early as this year as Toyota itself expects a drop in sales due to a slump in its home market of Japan.

However, Winterkorn has reportedly encountered growing opposition from certain members of the board, due to sluggish sales in the USA and little progress in the development of a low-cost car targeting emerging markets.

Ferdinand Piech is now 77 and is expected to retire in 2017. Winterkorn’s contract is due to expire in December 2016 and if renewed, he is expected to become Piech’s successor as VW’s Chairman.

Source: Bloomberg

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Last edited by Tushar : 13th April 2015 at 12:51.
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Old 13th April 2015, 14:18   #3
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

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As per new sources, Under Winterkorn's watch, VW has expanded from eight to twelve brands, more than doubled the number of production plants to over 100 and boosted sales 64 percent to a record 10.1 million vehicles last year (2014).
http://www.cnbc.com/id/102578800

Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!-vw-sales.jpg

Since Mr. Winterkorn took the helm in 2007, unit sales rose 77% to 10.2 million vehicles last year, revenue surged 92% to 202 billion ($214 billion) and net profit tripled to 10.8 billion.
http://www.wsj.com/articles/volkswag...any-1428868982
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Old 13th April 2015, 14:30   #4
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

Wow, big numbers. No wonder they do not mind being a bit player in the Indian Market. Looks like, even if they gain a good share of the Indian market, in the bigger scheme of things, it will be a drop in a bucket.
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Old 13th April 2015, 15:47   #5
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

Piech - an enormously driven over-achiever - is not the guy you want to fight with. Porsche & Wiedeking tried....they lost & how - related article.

This time though, Ferdinand might have met his match. Winterkorn has steered VW rather well in his time at the top. What's more, he has the support of some family members as well as the union.

Quote:
However, Bernd Osterloh, works council chief of VW, a bastion of unionised labour, stood by Winterkorn, saying in an email he would back an extension of the CEO's contract.

So did the state of Lower Saxony, which owns a fifth of VW's voting shares and on Friday came out backing Winterkorn, saying in a statement that the carmaker's development is positive.

Together, Lower Saxony and labour leaders have majority control of the VW supervisory board, with important decisions such as the opening or closing of plants requiring a two-thirds majority on the 20-member panel.
Source
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Old 13th April 2015, 16:00   #6
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

By God, $200B~ (I dont have a Euro Key! )

Those 2 uncles' ego aside, no wonder such behemoths care a damn about Indian market, may be damn is a wrong word, but say, dont take Indian market seriously. I mean why should they.

All blood, sweat and tears and 2-3 years later they may push the 200 to 201?, 203? Not worth it... Instead just make sure they have a presence felt, keep their (western, non-indian) shareholders and investors happy about a 'large' portfolio of nations and be all gung-ho while a few skoda owners vent it on local media and not much help coming along.

I dont see Maruti and Hyundai (and say tata and MM) changing overall %s for many years to come.
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Old 13th April 2015, 17:19   #7
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

From wikipedia,

Maruti's figures for the financial year 2013-14

Revenue

INR43272 crore (US$6.8 billion) (2013-14)

Net income

INR2469 crore (US$390 million) (2013-14)

courtesy http://www.business-standard.com/art...2500556_1.html

Maruti as a percentage of the VW group.

Revenue: 6.8/202= 0.033%
Income: 0.39/10.8= 0.036%

So assuming that VW manages to somehow completely convert Maruti's share of the Indian market, the benefit it accrues is almost imperceptible!

No wonder they don't take the market seriously enough!
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Old 13th April 2015, 18:29   #8
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Default

Quote:
Originally Posted by batterylow View Post

Revenue: 6.8/202= 0.033%
Income: 0.39/10.8= 0.036%

So assuming that VW manages to somehow completely convert Maruti's share of the Indian market, the benefit it accrues is almost imperceptible!

No wonder they don't take the market seriously enough!
Shouldn't you multiply by 100 to quote the percentage? So revenue of Maruti Suzuki India should be 3.3% of Volkswagen's global revenue, and income should be 3.6%.

Still your point is valid. Indian market is negligible for Volkswagen.
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Old 13th April 2015, 19:52   #9
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

Quote:
Originally Posted by rohanjf View Post
Shouldn't you multiply by 100 to quote the percentage? So revenue of Maruti Suzuki India should be 3.3% of Volkswagen's global revenue, and income should be 3.6%.
Yes, my bad, you are correct.

I left out the 100

Revenue: 6.8/202= 3.3%
Income: 0.39/10.8= 3.6%

Last edited by batterylow : 13th April 2015 at 19:54. Reason: Additional data
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Old 15th April 2015, 20:24   #10
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

VW Groups world wide production is well over 100 lakh units. Its sales in India is I estimate less than 50,000 or so. We are a rounding off error in VWs bigger scheme of things. German companies have a method to their madness in that they go slow and steady. Look at the German companies with large operations in India- Siemens, BASF, Bosch, Henkel, Abicor, Bayer - most built their business slowly in steps and kept at it through the decades and most maintain a low profile. I guess when India's time comes on their global screen VW too will up the ante and start paying more attention to its after sales service and a lot more.


http://www.bloombergview.com/article...e-at-the-wheel
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Old 16th April 2015, 18:34   #11
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

Looks like Herr Winterkorn's days may be numbered if Piech has his way.

Came across this news snippet. Looks like a showdown is imminent.

http://www.autocar.co.uk/car-news/in...-vw-sales-slip

Source: Autocar UK
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Old 16th April 2015, 19:28   #12
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

Quote:
Originally Posted by GTO View Post
Piech - an enormously driven over-achiever - is not the guy you want to fight with. Porsche & Wiedeking tried....they lost & how - related article.

This time though, Ferdinand might have met his match. Winterkorn has steered VW rather well in his time at the top. What's more, he has the support of some family members as well as the union.



Source
Potentially

@GTO: I have always found it confusing on how the Porsche vs VW saga is presented as Porsche family's 'loss' against VW's might. I have researched this aspect quite a bit, and the way I see it that the Porsche / Piech family ultimately scarified full ownership or Porsche AG (the car manufacturer) to VW, while gaining 51% of VW itself. So Porsche SE (which represents the family) now owns 51% or VW, and VW owns Porsche AG (the car maker). Before all this happened, the family merely owned Porsche AG, and now they control both VW and (through it) Porsche as well. And they managed this without spending cash from their pockets!!

So I am not sure if the Porsche/Piech families came off too badly. This could be a good topic for further research and discussion.

Last edited by vipul_singh : 16th April 2015 at 19:30.
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Old 16th April 2015, 20:07   #13
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

Mayuresh Wakade has an interesting comment to share:

Quote:
When I saw the comparison of VW and Maruti Suzuki (India) revenue and income, I remembered that VW is getting a good portion from Suzuki as its share holding is approximately 20% (in Suzuki).

So, even if VW don't outsell Maruti, it enjoys income from the Indian market .
source: http://en.wikipedia.org/wiki/Suzuki, http://www.globalsuzuki.com/corporat...ny_profile.pdf
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Old 17th April 2015, 18:50   #14
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

VW's top board group backs Winterkorn as 'best possible' CEO.

The leadership committee of the German automaker's supervisory board said Winterkorn, 67, was the "best possible" chief executive and had the group's "full support,"
The committee, which comprises Piech and five other members, plans to propose to the full board in February that Winterkorn's contract be extended beyond 2016.

http://www.autonews.com/article/2015...autonews-blast
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Old 25th April 2015, 23:04   #15
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Default re: Winterkorn vs Piech: Discord in VWs leadership. EDIT: Piech resigns!

Breaking News - Ferdinand Piech has resigned from VW. In addition to Piech, his wife, who is also on the board of VW Group has resigned.

http://www.bbc.co.uk/news/business-32468360
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