Piech’s Winter-korn of discontent

The era of Ferdinand Piech comes to an end after boardroom showdown

It’s official – Piech is out and Winterkorn is in.  These are interesting times as we watch grand old men trying to undo the very successors that they handpicked. Of course, it’s all for the “greater good” – wink, wink.

In the “good old days”, when car companies were run by men, not corporations, owners ruled the roost like medieval Fiefs. It was far more personal and less about business. Names like Enzo, Henry and Ferruccio were the stuff of legend. Globalization changed all of that. Today’s automotive world is about the brand and the corporation, very little about the men, bar one – Volkswagen Group.

Ferdinand Karl Piech – in terms of pedigree, this is a man who walked among the gods. Not only did he carry the name of his illustrious grandfather, he proved to be a brilliant “car man”, distinguishing himself with successful stints at both Porsche and Audi. The iconic 917 immortalized by Steve McQueen in Le Mans and Audi 80, were some of his more well known earlier contributions.veyron

But these were just appetizers, though. In 1993, he took over as the Chairman of Volkswagen Group’s Management Board, and the full mettle of the man came to fore. He took a company that was on the verge of bankruptcy and turned it around to become the automotive juggernaut that it is today.

Der neue Volkswagen PhaetonAnd he did so in imperious style. His time at Volkswagen was marked equally by his successes as much as his aggressiveness and demanding style. Under his watch, the Volkwagen Group embarked on a series of ambitious projects that saw it punch way above its weight class.

So omnipotent had he become, that even spectacular missteps like the Rolls-Royce debacle and the unloved Phaeton didn’t seem to faze him, though the group can claim to have the fastest road car in the world, the Bugatti Veyron.

Piech had his fingers in all the pies and there was precious little that happened without his express approval. Woe betide anyone who didn’t toe-the-line. The list of casualties include the likes of Bernd Pischetsrieder and Wendelin Weideking, CEOs of Volkswagen and Porsche, respectively.

So powerful was Piech, that a carefully placed hint of his displeasure, spelt doom. So who can blame the old man for thinking that his comment in Der Spiegel would cause the board to show Winterkorn the door. But this time, it would seem that Piech had overestimated his position. The Board stood by Winterkorn and it was Piech who was left out in the cold.

Martin Winterkorn (below) was heir apparent. Handpicked and groomed by Piech, he was the golden boy who had the boss’s ear. In serving as faithful acolyte, Winterkorn was able to prove himself a solid leader and the rest of the board took notice.

At the same time, many of Piech’s chickens had come home to roost. The unbridled expansion and prestige projects seemed to have garnered more in the way of headlines than actual business returns. While the Group is now in the “Big Three” of manufacturers, their profits have stayed relatively flat. The much touted American strategy also seems to have come undone as the brand has not made headway despite significant investments there.

Perhaps, seeing his vision fall apart was too much for Piech and hence the about-face towards Winterkorn. Perhaps it was that he couldn’t accept that some of his much vaunted strategies were not fully thought out. Who really knows?

In any case, we are seeing the end of an era. Piech was one of those larger-than-life characters who made for a great tale. He will be remembered for many things – some good, some great and some we’d sooner forget. But after 22 years, it must be very difficult to let go and it requires great strength of character to walk away gracefully. At least he’s doing that.

Press release by Volkswagen AG following Ferdinand Piech’s resignation