Speculation mounts on Porsche's future

19th July 2009, Comments 0 comments

An online report by Spiegel magazine said the Porsche and Piech families that control the company would replace Wendelin Wiedeking and name production chief Michael Macht as new CEO of its core sports car operations.

Frankfurt -- Speculation mounted Friday on whether Porsche's embattled boss would keep his job, drawing sharp denials from the sports car maker amid moves to tie it to Europe's biggest auto firm, Volkswagen.

An online report by Spiegel magazine, which did not identify its sources, said the Porsche and Piech families that control the company would replace Wendelin Wiedeking and name production chief Michael Macht as new CEO of its core sports car operations.

Another German weekly, Wirtschaftswoche, reported on Wednesday that Wiedeking would quit amid an epic boardroom battle for control of Volkswagen. Porsche swiftly denied both reports.

"I absolutely reject this speculation," Porsche supervisory board head Wolfgang Porsche was quoted by a spokesman as responding to the Spiegel story.

The head of Porsche's works council Uwe Hueck voiced support for the boss, saying in a statement that "Wiedeking is the chief executive and will remain so."

Hueck said "false information" was the result of an attempt to "destroy a man."

Both Porsche and Volkswagen have called board meetings on Thursday in Porsche's home town of Stuttgart, raising speculation that a deal may be near.

Wiedeking on Thursday personally denied rumours that he would resign as chief executive, saying he planned to complete his contract which expires in 2012.

He has come under fire after running up Porsche's debt as the company acquired nearly 51 percent of the shares in VW, and stock options for another 20 percent.

Wiedeking had sought to buy 75 percent of VW's equity, but the collapse of global auto markets and stricter credit conditions as a result of the financial crisis have impaired conditions for an auto company takeover.

VW had since made a counter-offer for nearly half of the shares in Porsche, saying that a sale would allow Porsche to trim its debt of around nine billion euros (12.6 billion dollars).

Wiedeking is battling meanwhile to take on the Gulf state of Qatar as an investor in Porsche, and the families that control voting rights in the car maker are to study the question next week.

But Christian Wulff, regional premier of Lower Saxony, the German state that owns 20 percent of VW, said he wanted the group to integrate Porsche as its 10th brand.

That position "should be supported by a large majority" on Thursday, Wulff told the magazine WirtschaftsWoche in comments due to appear Monday but released in advance.

He added that Qatar did not want a direct stake in Porsche but rather to invest in an integrated group.

"Qatar is very well informed and intervened clearly and predictably with a desire to acquire a holding in a Volkswagen/Porsche group," Wulff said.

He expressed no opposition to Qatar acquiring an eventual blocking majority in VW similar to one held by Lower Saxony thanks to a special law drawn up for the automaker. "The VW law is not exclusively for Lower Saxony," he said.

AFP/DowJones/Expatica

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