Piëch vs Winterkorn: The Cold War For Volkswagen’s Future

Trouble is afoot at the top of the Volkswagen Group with a rift forming among its most senior leadership. The crisis involves CEO Martin Winterkorn and group chairman Ferdinand Piëch, who previously held the CEO position.

In their report, Reuters points to several German publications that state Piëch (pictured above, left) is ‘distancing’ himself from Winterkorn (above, right) and has declared a lack of confidence in his leadership. Winterkorn, to his credit, has had a sterling career as the group’s CEO, leading to arguably its most successful period in history and is confident that the attempts to undermine his contract (ending in 2016) renewal prospects will prove unsuccessful.

During the group’s eight-year stewardship under Winterkorn, the company has expanded its umbrella from eight to 12 brands and has overcome high a labour costs crisis to become one of the automotive industry’s most influential powerhouses, selling a record 10.1 million vehicles in 2014. According to the report, Winterkorn does not intend to quietly step aside from his post at the head of VW even if he is met with powerful detractors, and will not let such a decision succumb to politicking. Sources say that many senior officials within the company have chosen to side with Winterkorn.

Piech, who is largely responsible for VW’s incredible transformation from middling automaker to the international conglomerate it is today, sat at its helm for 22 years before stepping down to a assume the position of chairman, during which time he installed Winterkorn as his successor. Piech is the grandson of Ferdinand Porsche and is part of a clan that still owns a combined 51 percent of the VW Group.

The Porsche family has released a statement through their spokesperson Wolfgang Porsche, saying "The statement from Dr. Piëch portrays his private opinion, which is not aligned…with that of the family," calling into question this apparently baseless criticism of the VW CEO, leaving Piech in a somewhat solitary position in his views. The VW staff council, holding half the seats on the company’s supervisory board, came to Winterkorn’s defence as well.

VW’s enigmatic chairman has had a history of steering the careers of the company’s leadership and those of its subsidiaries to suit his needs and plans. In 2006, then-CEO Bernd Pischetsrieder had come under pressure from labour representatives and during an interview with the Wall Street Journal, Piech stoked the flames further by declaring it an “open issue” whether or not his contract would be extended as a result, resulting to Pischetsrieder’s tenure being cut short . A few years later in 2009, Piech publicly tarnished the professional image of Porsche CEO Wendelin Wiedeking and its Chief Financial Officer Holger Haerter, starting a series of events that led to both executives quitting within two months.