Chairman Piech's grip on Volkswagen weakened by row with CEO

Sun Apr 19, 2015 11:43am EDT
 
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By Andreas Cremer and Jan Schwartz

BERLIN/HAMBURG (Reuters) - Volkswagen (VOWG_p.DE: Quote) Chairman Ferdinand Piech's iron grip on the German carmaker has been severely weakened following a dramatic confrontation with senior board members last week that nearly resulted in a push to oust him, sources told Reuters.

Piech, patriarch of the family that founded Volkswagen and a dominant figure at the automaker for more than two decades, triggered a leadership crisis at the Wolfsburg-based firm by criticizing Chief Executive Martin Winterkorn in a magazine article earlier this month.

After an emergency meeting in Salzburg last Thursday to resolve the row, a group of six senior board members, including Piech, gave their full backing to Winterkorn and agreed to propose an extension of his contract beyond 2016.

But sources briefed on the meeting said on Sunday that the vote of confidence in Winterkorn came only after a full-blown confrontation between Piech and the other five board members.

Piech's office in Salzburg and VW declined to comment.

One source said the chairman himself had raised the prospect of resigning. Another said the other five members were ready to demand that Piech step aside had he not backed down belatedly on Friday morning, a day after the Salzburg meeting, and signed up to the statement giving Winterkorn "full support".

"Piech was completely isolated," said one VW supervisory board member who declined to be named because of the sensitivity of the subject.

"The question of who will chair the board (when Piech retires) won't be decided until 2017 unless Mr Piech draws the consequences after this crisis which he alone provoked."   Continued...

 
Ferdinand Piech, chairman of the board of German carmaker Volkswagen, carries his documents as he arrives at the 51th annual shareholders meeting in Hamburg on May 3, 2011.  REUTERS/Fabian Bimmer