Volkswagen mired in crisis as board members criticize Piech

Fri Apr 24, 2015 12:31pm EDT
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By Andreas Cremer and Jan Schwartz

BERLIN (Reuters) - Volkswagen's (VOWG_p.DE: Quote) leadership crisis is refusing to go away, a week after its warring chairman and chief executive officially put aside their differences, sources told Reuters.

Chairman Ferdinand Piech, who was forced to back CEO Martin Winterkorn after being isolated in a five-to-one board vote last week, asked Porsche CEO Matthias Mueller this week to be ready to replace Winterkorn, Der Spiegel reported on Friday.

The German magazine did not give the source of its information. Both Piech's office in Salzburg and Porsche declined to comment on Friday.

The leadership row burst into the open this month when Der Spiegel quoted Volkswagen patriarch Piech as saying he had "distanced" himself from Winterkorn.

The comment comes at a time VW is cutting billions of euros of costs and revamping structures to boost profitability and it prompted the vote by the six-member panel on VW's board that includes Piech and one Porsche family member.

However, a source close to VW said on Friday that the Piech and Porsche families, who together hold 51 percent of the voting shares in Volkswagen, had held another meeting this week, indicating that there are still ongoing differences.

Members of VW's 20-seat supervisory board are rapidly losing patience with Piech's behind-the-scenes machinations, which is hurting VW as it strives to tackle underperformance in foreign markets, sources said.

"The chairman has unilaterally plunged the company into the greatest turbulence possible," a labor representative on the board told Reuters. "He really should think about what that means for him and his own position."   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 (GERMANY - Tags: TRANSPORT BUSINESS) - RTR2LXPA