Piech vs. Winterkorn: Finally, a motive emerges

Puppet off the string

Puppet off the string

We’ll probably never know for sure what really caused the rift between emperor Piech and his no longer trusted vassal Winterkorn. All we knew last week was that what most of the media thought was the reasons (U.S.A., low cost line, profit margins) were not the real reasons. With Piech gone for good, the tongues loosen a bit in Wolfsburg, and people dare to talk. A version is making the rounds that at least makes a little sense.

According to this version, the real reason lies in the old Piech vs. Porsche fight, and in which side can count on Winterkorn. The account, which also has been picked up by usually well-informed Frankfurter Allgemeine, sees Piech having lost trust in his liegeman, whom he suspects of cavorting with the Porsches. Last week, many contacts at Volkswagen assumed personal reasons, and if the scenario is correct, they were right.

Winterkorn has always been Piech’s enforcer. When Piech took over as CEO of Volkswagen, the company had serious quality problems. Winterkorn was made head of Quality Assurance. In 2002, Piech made his water carrier head of Audi. In 2007, Chairman Piech ousted CEO Pischetsrieder. Winterkorn became CEO of Volkswagen. From the beginning, it was assumed in Wolfsburg that Winterkorn was the puppet, with Piech pulling the strings.

According to the story making the rounds, Piech could be thinking that Winterkorn is freeing himself from the strings, and that he turns into an ally of the Porsche faction. Allegedly, the seed for the suspicion was sown when Winterkorn bought the Porsche family mansion at pricey Herzogpark in Munich Bogenhausen, at a transaction characterized by the FAZ as a “sweetheart deal.”

Two years ago, there was a – quickly denied – story in Germany’s Handelsblatt that described the then 76 year old Piech as in frail health, and as soon to be stepping down, with Winterkorn the new chairman. At the time, many thought that Piech was looking a bit the worse for wear, but Piech had a different opinion. He issued a press release stating that there’s life in the old dog yet. According to rumor and general belief, Piech suspects Winterkorn of having leaked the story.

With Piech out, the carefully tuned balance of power could get completely out of alignment. Piech holds 13 percent of Porsche Automobil Holding SE, which controls 50.7 [percent of Volkswagen AG’s voting shares. According to the shareholder contract at the holding, other shareholder have the right of first refusal is someone wants out. However, the Porsche and Piech sides of the holding also are supposed to speak with one voice. “With that contract having been breached by both sides,” says the FAZ, “one could suppose that Piech is free to sell his shares to third parties, and to use that threat as leverage with the Porsches.”

PS: Several reliable contacts at Volkswagen discount this version. Said one of them: “The problem is much simpler, and also much bigger.”