Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

No strategy and a beige suit

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014

Read more

ENCORE!

Alain Choquette: A Hilarious Magician in Paris

Read more

FOCUS

France welcomes Iraqi Christian refugees

Read more

FRANCE IN FOCUS

Emmanuel Macron: A new economy minister with a pro-business agenda

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

#TECH 24

Changing the world, one video game at a time

Read more

IN THE PAPERS

Socialist Party summer conference kicks off in explosive atmosphere

Read more

  • Exclusive: Fabius warns of further sanctions against Russia

    Read more

  • Experimental Ebola drug ‘ZMapp’ heals all monkeys in study

    Read more

  • British killer escapes from French psychiatric hospital

    Read more

  • Ukraine to relaunch NATO membership bid

    Read more

  • Police hunt for British boy with brain tumour taken to France

    Read more

  • Chelsea’s Torres set for AC Milan switch

    Read more

  • France shines in IMF list of world’s promising economists

    Read more

  • Mapping Ukraine: Canada and Russia in ‘tweet for tat’ row

    Read more

  • First case of Ebola confirmed in Senegal

    Read more

  • Obama has 'no strategy yet' on potential Syria strikes

    Read more

  • Netflix to woo French with ‘House of Cards’ set in Marseille

    Read more

  • French businesses ‘hoping for a new Thatcher’

    Read more

  • Syrian refugees surpass 3 million, UN says

    Read more

  • West backs Ukrainian claims of Russian incursion

    Read more

  • Libyan PM resigns as Islamists set up rival administration

    Read more

  • UN says 43 peacekeepers captured in Golan Heights

    Read more

  • The deleted tweets of Manuel Valls

    Read more

  • Peru seizes record 6.5 tonnes of Europe-bound cocaine

    Read more

  • Pakistan army to mediate between PM, protesters

    Read more

  • In pictures: Billions of locusts invade Madagascan capital

    Read more

Business

Porsche chief resigns as tie-up with VW approaches

Video by Damien McGUINNESS

Text by Sébastian SEIBT

Latest update : 2009-07-23

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

COMMENT(S)