Porsche has announced the resignation of its chairman Wendelin Wiederking with 'immediate effect'. Wiederking is set to receive a severance package worth 50 million euros. Separately, the automaker has received the go-ahead for the Qatar deal.
The German press had named him the “Sun King”. But Wendelin Wiederking’s light has doubtless dimmed a bit since he resigned as chief executive of Porsche on Thursday.
In the wake of the controversy concerning both his salary – he was Europe’s highest-paid boss last year, with a salary of around 70 million euros – and strategy, the man behind the luxury carmaker’s rebirth was ultimately unable to withstand the pressure of the last few weeks.
Until recently, Wiederking had only known success. In 1992, when he took over Porsche, the company was mired in debt and on the verge of bankruptcy. In 10 years, he increased the turnover from 900 million to 7.4 billion euros, and erased losses by revamping production procedures and boldly cutting costs.
In 2002, the luxury car brand even reported profits of 6.3 billion euros. “Over the years, Porsche and Wiederking were one and the same in the eyes of the public,” explained Ulrich Viehover, author of a biography on the chief executive, in an interview with FRANCE 24.
But all the success may have gone to Wiederking’s head. During his glory years, he assumed a self-appointed role of unofficial German economy expert and took liberties in his management of the company, refusing, for example, to submit traditional quarterly results and arguing that he was only interested in the long-term. “He was also viewed as one of the toughest managers in Germany,” Viehover recalled. But Porsche’s impressive results largely granted him immunity.
Wendelin Wiederking’s announcement in 2005 of plans to buy Volkswagen was seen as an infringement upon a national institution. “He did not understand VW’s stature, its historical culture,” said Viehover. The heritage of Europe’s largest automobile maker is intimately linked to the Third Reich, and unions and politicians after the war wanted to redeem the company by making it a sort of national symbol of a new democratic era. Wiederking ruffled feathers when he spoke out against the role of unions and politicians in shaping VW’s image.
But that’s not what cost him his job - Wendelin Wiederking succumbed to the financial crisis and speculation. “With the crisis and the beginning of a difficult period, the things people used to forgive him for became harder to swallow,” said Viehover. Though he assured shareholders to the contrary, Wiederking speculated on the markets and suffered considerable losses. “Banks left him, one after another,” Viehover said.
Porsche currently has a 10-billion-euro debt and its independence is threatened. In light of current economic conditions, Wiederking’s salary looked like nothing more than a vulgar provocation. Though Wiederking sought out lucrative investment talks with Qatar, he won’t see the payoff as chief executive of Porsche.
“The coming days will show what the VW-Porsche tie-up will look like,” concluded Viehover.
Date created : 2009-07-23