Volkswagen chairman appears isolated on board after CEO criticism
By Ilona Wissenbach and Andreas Cremer
BERLIN/STUTTGART, Germany (Reuters) - Volkswagen Chairman Ferdinand Piech is facing growing resistance within the supervisory board to his criticism of Chief Executive Martin Winterkorn, deepening a leadership crisis at a time when Europe's largest carmaker is struggling to revive profits.
Piech on Friday publicly withdrew his confidence in Winterkorn who has been at the helm of the automaker since 2007, telling German magazine Der Spiegel he has "distanced" himself from the CEO.
Piech's remark, exposing unusual dissent between VW's (VOWG_p.DE: Quote) two top leaders, undermines the CEO's prospects of extending his contract beyond 2016 or to become chairman himself when Piech retires, most likely in 2017, analysts said.
Wolfgang Porsche, chairman of the Porsche SE (PSHG_p.DE: Quote) holding company which controls 51 percent of VW common stock, on Sunday threw his backing behind Winterkorn, siding with the state of Lower Saxony, VW's second largest shareholder and its labor leaders.
"The comment from Dr Piech represents his personal opinion which has in substance and factually not been coordinated with the family," said Porsche, a cousin of Piech and a member of VW's supervisory board.
The state of Lower Saxony, where VW is based and which owns one fifth of VW's voting shares, as well as the carmaker's labor leaders who represent half of the 20 members on VW's supervisory board on Friday gave their backing to Winterkorn.
Winterkorn, who in his eight-year reign has overseen VW's transformation from a struggling German group saddled with high labor costs into one of the world's most successful automakers, will fight for his job and feels emboldened by support from strong allies, company sources said on Saturday.
Piech's remark has plunged VW into turmoil at a time when it is seeking to cut billions of euros of costs to boost profitability at its troubled core division while struggling to forge a long-planned alliance of truck brands and to revive operations in the United States. Continued...