The Way Forward after Dieselgate: ‘We Will Do Everything to Bring VW Back’

October 26, 2016

The Porsche and Piëch families are a dynasty. And like many dynasties, they are rich, powerful, sly — and withdrawn.

Most members of a dual families don’t go looking for attention, yet one of them, Wolfgang Porsche, famous as Wopo, will spasmodic make a incursion into a spotlight. Often, he displays a light clarity of irony, such as when he ran into comparison

VW manager Herbert Diess during a Paris Motor Show recently. “I usually systematic a Volkswagen Up,” Porsche said. ”It won’t be adequate to bail us out,” Diess responded with a devious smile. Porsche: ”Okay, let’s call it a prejudiced bailout.”

His cousin, by contrast, Hans Michel Piëch, is mostly opposite to a ubiquitous public. Indeed, he is means to ramble through

engine shows in Paris, Geneva or Frankfurt with his daughter yet being approached by reporters or other extraordinary onlookers.

The dual of them, though, Wolfgang Porsche and Hans Michel Piëch, are now a dual many vicious people on VW Group’s house of directors after Ferdinand Piëch, who led a vehicle sovereignty for decades as arch executive and, later, as authority of a supervisory board, was forced to step down final year. His try to get absolved of thereafter

VW conduct Martin Winterkorn in Apr 2015 was never forgiven.

At a time, a family seemed divided and it remained misleading who hold a reins after a absolute Ferdinand Piëch’s resignation. It was also misleading a border to that he still hold influence. And even as a questions swirled, a Dieselgate event — a find that VW had intentionally automatic diesel vehicles to mistreat emissions controls — was plunging a association into a biggest liaison in a history.

As such, a corner speak that Porsche and Piëch gave to SPIEGEL in Salzburg can be review as a vigilance that a families are not estranged, that they are steering a house by this predicament together.

The families possess some-more than 52 percent of a VW Group’s voting shares, creation them a many successful families in a German vehicle courtesy detached from a Quandts. There is, though, a vicious difference: At BMW, dual family members, Stefan Quandt and his sister Susanne Klatten, possess 47 percent of a company’s common stock. They alone contingency determine on vicious decisions. When it comes to Porsche and Piëch, by contrast, that series is now eight, and in a subsequent epoch it will be 34. If there are differences of opinion about vicious issues, such as who should spin a subsequent arch executive, it can solidify adult a whole Volkswagen Group.

Together, a families are a biggest stakeholders in a company, distant incomparable than other seductiveness holders such as a German state of Lower Saxony and Qatar. And discordant to renouned belief, a families emerged winning from a takeover dispute between Porsche and Volkswagen.

When a dispute began in 2005, a Porsche and Piëch families owned all of a common batch of Porsche, that was swallowed by Volkswagen and is now merely one of 12 brands underneath a absolute of a Wolfsburg-based company. But a families now have a infancy of a voting shares of a VW tellurian corporation, creation a dynasty some-more abounding and absolute than ever before.

One cunning consider a Porsche-Piëch family would be utterly happy — if not for a several conflicts over a march of a final several decades.

Things initial got exhilarated in a early 1970s, a time when 4 family members worked in Porsche government and disagreed to such an border about a company’s instruction that they brought in a organisation therapist. After a initial event it became clear: The repairs could not be repaired. It was thereafter motionless that, for a good of a company, all family members would be private from Porsche management.

Only one member of a house continued to pursue a career in a vehicle industry: Ferdinand Piëch, initial during Audi, thereafter during Volkswagen. He pushed enlargement forward, investing in

Scania, MAN, Ducati, Bentley and Bugatti. And if there were conflicts between him and a other family members, Hans Michel Piëch and Wolfgang Porsche searched for a solution, mostly on corner trips to a US, where both sat on a house of directors of Porsche Cars North America.

Shortly after a dual took over a purpose as leaders of a families final year, US authorities unclosed a VW diesel scandal. It was a plea for a supervisory house and for

a families, who faced accusations that they had mislaid control. Essential decisions finished by a supervisory house a

re still being criticized.

Why, for example, are Matthias Müller and Hans Dieter Pötsch, dual long-term association managers, now a authority of a house of government and a supervisory house chairman, respectively? Are they unequivocally a right people to spin a association around? Why did a house collect millions in bonuses, notwithstanding a billions in losses? Most importantly, how do Wolfgang Porsche and Hans Michel Piëch intend to fill a opening left by a depart of Ferdinand Piëch?

In a past, a dual elite to yield created answers to reporters’ questions. But they sat down for an speak with SPIEGEL during

Porsche Holding in Salzburg. A bust stood on a sideboard: Ferdinand Porsche (1875 to 1951), who once laid a cornerstone for a vehicle dynasty, peered over a shoulder of his dual descendants.

SPIEGEL:

Mr. Porsche, Mr. Piëch, was it a formidable preference to lay down for a corner speak — one Porsche and one Piëch?

Porsche:

That’s a standard SPIEGEL question. You consider that a families have 0 improved to do than constantly quarrel with one another. That’s nonsense. Of march we don’t always share a same opinion. But we speak prolonged adequate until we find a common position, that we thereafter support together. On a prolonged term, that has been really successful for a company.

Piëch:

Look how Porsche Holding grown in Salzburg and Porsche AG in Stuttgart. In 1993, Porsche AG was in a vicious state. Many people didnt trust a association had a future. Back then, we laid a substructure for a arise of Porsche.

SPIEGEL:

In standard SPIEGEL fashion, we would like to ask we about stream problems. Your families are a largest shareholders of a Volkswagen Group, that is now inextricable in a biggest predicament in a history. What went wrong?

Piëch: One needs to make a eminence here. When it comes to a diesel affair, it’s about a authorised and technical questions that contingency be resolved in sequence to replenish a ensuing financial waste and win behind a trust a association lost.

Then there’s a emanate of Volkswagen. The code needs to be many improved prepared for a future, and we indispensable to rearrange a care of a association after my hermit Ferdinand stepped down as authority of a house and Martin Winterkorn stepped down as CEO.

Porsche:

After a departures of Ferdinand Piëch and Martin Winterkorn, a initial priority was that of anticipating a best people for a CEO and authority of a house positions.

SPIEGEL:

When a diesel event became public, Winterkorn was urged to renounce by others — by IG-Metall’s Berthold Huber, Bernd Osterloh of a works legislature and Lower Saxony Governor Stephan Weil. But we wanted to keep him?

Porsche:

We weren’t a usually ones. At first, everybody suspicion that Mr. Winterkorn’s agreement should be extended. The house eventually adopted a position that an prolongation in this conditions wouldn’t have finished sense. we privately suggested Mr. Winterkorn not to find a agreement extension, given he potentially would not have perceived adequate votes. After that, he pronounced of his possess accord: I’m holding on a domestic responsibility.

SPIEGEL:

In a midst of a company’s biggest crises, a Porsche and Piëch families were hardly manifest in public. It looked as yet a worker member and a state administrator had taken over control.

Piëch: It cunning have seemed like that from a outside. Decisive, though, was a fact that we brought in a CEO, Matthias Müller, who has a cunning to solve problems and lead a company.

Porsche: Following heated discussions, we always concluded about a proceed forward. But politicians need to explain themselves some-more in public. As a family, we are some-more indifferent when it comes to open comments.

SPIEGEL:

The families couldn’t even determine on a authority of a supervisory board, that is because Huber, a kinship leader, had to take over a job. It looked like we were incompetent to take action.

Porsche:

We didn’t wish to act spontaneously, yet sought to make a good thought-through decision. We were always means to act. The worker member wanted me to take over as authority of a supervisory board, yet we didn’t wish to. For that reason, we was gratified that Mr. Huber finished himself accessible and took on a position until we could strech a new decision.

Piëch:

The clarity of a opening cunning have stemmed from a fact that my hermit played a really opposite purpose from that of a normal supervisory house chairman. He had spent many years as arch executive and he is an well-developed engineer. He had a singular proceed to a association and was intensely meddlesome in daily operations.

SPIEGEL:

He exerted change over a models and a engineering, down to a details. For example, he once wanted a change to be finished to a figure of a hood for a Porsche Macan.

Piëch: We are opposite and we see a purpose as family member differently. Our simple position is: The government house creates proposals. When they make sense, we will go along with them. We don’t meddle in daily operations. Our many vicious charge is anticipating a right people to lead a association and thereafter to concede them to do their work.

SPIEGEL:

For that to happen, a families initial of all need to be in agreement. Ferdinand Piëch wanted Wolfgang Reitzle, a former manager of BMW and Linde, to take over as authority of a board. Instead, we went with VW arch financial officer Hans Dieter Pötsch.

Porsche:

Mr. Reitzle is an glorious engineer. We’ve famous any other for many years. But a low bargain of a association is an vicious exigency for being a clever authority of a house of a Volkswagen Group.

SPIEGEL:

That bargain of a association can, however, also be a burden, given that Mr. Pötsch competence also have been concerned in all of a things that are now being privileged up. As such, it seems like an apparent preference to move in someone from outside, someone who is untainted.

Piëch:

That competence demeanour obvious, yet we have always had success by installing people from within a association into care positions. We have a lot of trust in Mr. Pötsch.

SPIEGEL:

Mr. Pötsch contingency confirm either repairs claims stemming from a diesel event should be finished opposite a association care to that he once belonged.

That is a classical dispute of interest.

Piëch: There is no dispute given it is a preference that contingency be finished by a whole supervisory board. Such decisions are finished giveaway of conflicts of interest.

SPIEGEL:

As arch financial officer, Mr. Pötsch was obliged for gripping a German batch sell informed.

There are repairs claims that credit VW of informing a open too late. As authority of a supervisory board, Mr. Pötsch contingency now investigate his possess work as arch financial officer. How is that ostensible to work?

Porsche:

The Volkswagen Group has a transparent authorised position on that, and we mount entirely behind Mr. Pötsch.

SPIEGEL:

Your preference to implement Matthias Müller as CEO was usually as argumentative as a preference to designate Mr. Pötsch. He formerly hold comparison positions during Audi, VW and Porsche. How can he be a convincing figure to lead a association out of a crisis?

Porsche:

We need to demeanour ahead, and for that we need somebody with a claim abilities. In a view, Mr. Müller has them to a top degree. For that reason, there was small contention about a appointment of Mr. Müller, and this preference has proven to be a scold one.

Piëch:

Of course, a diesel event needs to be privileged up. That is a pursuit of a Jones Day law firm, that is operative totally independently. And if consequences contingency be drawn, thereafter they will be drawn. On a other hand, though, we need to lead a association into a future. To do that, we need a best manager.

SPIEGEL:

As members of a supervisory house of a VW Group, we are obliged for another argumentative decision: Members of a VW government house perceived bonuses

despite a diesel scandal. Could it be that we dual — rich people who live in Salzburg — cunning not comprehend what that looks like from a outside?

Porsche:

Actually a house did abstain a few things. we would have elite it if stretchable remunerations had been totally deserted during that moment.

SPIEGEL:

Why didn’t we insist on your position?

Piëch: According to their contracts, a house members had a right to a bonus. That proviso was not tailored to a box like a diesel affair. A partial of a bonuses is tied to earnings from a past 4 years. A bad year lowers a bonus, yet it doesn’t move it down to zero. But we will acknowledge we are right: When it comes to external appearances, it would have been improved had a house waived them. Mr. Pötsch has addressed a emanate and is operative on a new regulation.

SPIEGEL:

Its still misleading how many a diesel liaison will cost: 20, 30, maybe 50 billion euros. Is it probable that a VW Group will list tools of a association on a batch sell in sequence to lift money, like Audi, for example, or Porsche?

Porsche:

From today’s perspective, there is no need for that. we trust that a measures that have been instituted will be successful.

Piëch: we am assured that solutions will be found that are sufferable for a company. We will conduct this. The Group, after all, isn’t usually Volkswagen. Skoda, Seat, Porsche, Scania, to name usually a few brands, are doing utterly well.

But of course, a conditions stays utterly serious.

SPIEGEL:

The Volkswagen code doesn’t usually have to understanding with a consequences of a diesel scandal. With a high costs, it is not competitive. But how will it be means to cut costs when Lower Saxony and a worker member on a supervisory house can retard everything?

Piëch:

Everybody can see that copiousness contingency be done. Volkswagen can’t keep operative with a slim handling margin. The code needs to spin some-more fit and essential in sequence to be successful in a future.

Porsche:

All vehicle makers, including Daimler and BMW, have to deposit some-more than ever before — in electric vehicles, in digitalization, and many more. If we wish to have secure jobs, there has to be sufficient liquidity. Otherwise, you’ll be confronting vast problems.

SPIEGEL:

Does Osterloh, a conduct of a works council, see it a same way?

Piëch:

Mr. Osterloh has an glorious trust of a company. He sees a mercantile problems and challenges. For him, its about a gratification of a company, as it is for us.

Porsche:

Of course, a works legislature and a state of Lower Saxony don’t take things lightly, and conjunction do we, when jobs are during stake. We will try to make things as sufferable as possible, with early

retirement and other measures. But we can’t do things as they were finished in a past, when

3,000 people were sent into early retirement and thereafter 3,000 new employees were hired.

SPIEGEL:

Workers contend that pursuit certainty should be usually as vicious to a association as adequate returns. Do we see things a same way?

Piëch:

we see things really simply: If a business is not functioning, it creates small clarity to speak about jobs. Volkswagen needs to reduce costs. Mr. Diess, a conduct of a Volkswagen brand, has already finished a lot in that regard. we have a feeling that things are going in a right direction.

SPIEGEL:

Mr. Diess is constantly doing dispute with Mr. Osterloh. How prolonged will that conditions continue?

Porsche:

We will give Mr. Diess a full support, usually as we support all of management. we was during a Motor Show in Paris and it’s been a prolonged time given I’ve seen a display as glorious as Mr. Diess’ of a electric car. It is considerable what Volkswagen has managed to do in such a brief volume of time.

SPIEGEL:

Are we incompatible a probability of layoffs or plant closures?

Porsche:

That is something a house needs to negotiate that with a worker representatives. We have full certainty that a best resolution will be found here, and of march it is always improved if layoffs can be avoided.

SPIEGEL:

The supervisory house of a VW Group includes politicians, works legislature representatives, a Porsche and Piëch families as good as Qatar. Among this group, not a singular one has knowledge heading an industrial company, with a difference of Mr. Pötsch and his conflicts of interest. Why do we abstain a imagination of specialists?

Piëch:

Porsche AG in Stuttgart and Porsche Holding in Salzburg, a largest automotive distributor in Europe, are rarely successful companies. That would not have been probable yet a expertise.

SPIEGEL:

But Porsche was a vast

mid-sized association with 10,000 employees. VW is a tellurian house with over 600,000 employees and 12 brands.

Piëch:

These are all vehicle companies. Of march politics play a bigger purpose with vast corporations. But in a final analysis, a tasks confronting a supervisory house are a same. Porsche AG in Stuttgart is strongly driven by engineering, by new Porsche models. And Porsche Holding in Salzburg is a placement company, record and placement are executive for a long-term success of a business.

Porsche:

We have been operative in a vehicle courtesy for a prolonged time, half of a century, in element given early childhood. we myself worked in sales during Daimler, we led a Yamaha import business and have been on a supervisory house during Porsche and Salzburg’s Porsche Holding for a prolonged time. So we can trust us when we contend we know something about a vehicle industry.

SPIEGEL:

Still, one gets a clarity that patrimonial ties are some-more vicious than expertise. You are fixation augmenting numbers of your family members on a supervisory play of a Group and of a particular brands. Does a family have precedence?

Porsche: It is positively not a pushing principle.

SPIEGEL:

Your generation, a third one, had 8 members. In a fourth generation, there are 34. If it’s formidable now to get everybody on a same page, how will it work in a future?

Porsche:

Not all 34 will be means to join a supervisory play and be partial of a conversation, and not all of them will wish to. What’s vicious is that in a subsequent generation, suitable family members take an seductiveness and don’t simply wait to accept a dividends. Several of them are already on a play of several association brands. We classify meetings in that they news on their practice in sequence to see how they are doing. In a experience, that is a best way. Several will infer to be well-suited.

SPIEGEL: Who decides?

Piëch: There are 8 people in a generation. And now we are both sitting opposite from you. we consider it’s probable to find a right solution. In a subsequent generation, there are adequate people who are interested, who wish to lift on what we have finished so far.

SPIEGEL:

What happens if some of them wish to income out and sell their shares?

Porsche:

This doubt is given too many attention. My children are adhering with a company. we am assured that a other members of a fourth epoch will do a same, and we don’t consider that a younger epoch is usually meddlesome in discerning money. We have also determined an arrangement in a family that family members, in such cases, have favoured right (to buy a batch another family member competence be selling).

The shares of a Porsche Automobile holding SE won’t usually simply finish adult with a Chinese vehicle manufacturer or during a sidestep fund,

SPIEGEL:

Ferdinand Piëch has pronounced he is in preference of a families shopping adult Qatar’s shares of a VW Group. When he didn’t get infancy support for that plan, he is pronounced to have threatened to sell his shares. Does he wish out?

Piëch:

That’s speculation. You’d to ask my hermit himself. But we don’t trust it.

SPIEGEL:

What purpose does Ferdinand Pietch play during this point?

Porsche:

He is on a supervisory house of Porsche SE, yet differently he’s not on any other boards.

Piëch:

He is still meddlesome in a company, it’s his baby. He even buys cars from other manufacturers in sequence to see how good they are compared to a own.

SPIEGEL:

Ten years ago, we owned Porsche, a successful sports vehicle company, and could suffer life. The turmoil began with a VW-Porsche takeover battle: Countless repairs claims, a quarrel between Ferdinand Piëch and Winterkorn, a diesel liaison have followed. Do we infrequently crave for a aged times?

Piëch:

In a end, we finished a right preference behind then: Porsche couldn’t have finished a vast investments into electric mobility and digitalization on a own.

Porsche:

The Porsche epoch was nice. But we shouldn’t demeanour back. We will do all in sequence to move Volkswagen behind onto a trail of success.

SPIEGEL:

Mr. Porsche, Mr. Piëch, we appreciate we for this interview.

The essay we are reading creatively seemed in German in emanate 43/2016 (October 22th, 2016) of DER SPIEGEL.

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