It’s not all love and roses between VW and Porsche, Who will be the controlling entity? Options

[Richard Casto]

I just saw this interesting news item...

http://online.wsj.com/article/BT-CO-20090503-702820.html

We all know Porsche bought heavy into VW recently. But now Porsche is carrying a good bit of debt that they have to service. There has been some speculation that VW may try a reverse acquisition of Porsche. I find it interesting that Ferdinand Piech is involved. For those of you who don’t know the history, Ferdinand Piech was in a senior management position (engineering and racing) at Porsche with his eyes on eventually running the company. Ferry Porsche and his sister, Louise Piech decided that the next generation of the Porsche family was not the right group to run the company, so they basically restructured the company so that no family members would be directly running it. Rather they would have a supervisory board made up of Porsche and Piech family members and non-family senior management.

This effectively ended the careers at Porsche for Ferdinand Piech and Ferdinand “Butzi” Porsche (the other potential heir to the Porsche throne). Neither would be allowed to run the company. Butzi left Porsche to start “Porsche Design” and Piech left to join Audi and eventually run VW. Ferdinand Piech retired from the VW board in 2002, but remains as the chairman of the Supervisory Board and still has considerable influence at both VW and Porsche. Ferdinand is pushing for VW to take over Porsche. I wonder if at 72 years of age he is still trying to achieve his goal of rising to the top in the Porsche family hierarchy and control the company.