George S. May Business Blog

Porsche CEO and CFO step down — Porsche / Volkswagen merger imminent

The Volkswagen / Porsche struggle should come to a close as Porsche announced early this morning their long-time CEO, Wendelin Wiedeking, will be stepping down. With the resignation of Mr. Wiedeking, this all but certifies an evident pathway for the merger of Porsche and Volkswagen.

After an overnight meeting with Porsche’s supervisory board, Porsche came forward with the verdict that Wendelin Wiedeking would be replaced by Michael Macht, another board member until now in charge of production and logistics.

Holger Härter, chief financial officer at Porsche, will also resign immediately, according to the announcement.

 ”In the last weeks Wiedeking and Härter have come to the conclusion, that the further strategic development of Porsche SE and Porsche AG is better off, if they are not on board as acting persons,” the statement said. “They both see that step as a significant contribution to the appeasement of the situation and to support the forming of an integrated car manufacturing company.”

In other words, Mr. Wiedeking stepped down because he disagreed with the decision to have Porsche sell a stake in its automotive unit to Volkswagen; thereby enabling them to pay off the a debt of about 9 billion euros, or $12.8 billion.

Porsche’s debt is in large part due to its purchase over the last four years of 51 percent of the shares of Volkswagen, the largest carmaker in Europe, and it has pushed Porsche to seek out new investors, including the Qatar Investment Authority, the country’s sovereign wealth fund.

Mr. Weideking, who first joined Porsche in 1983, spent nearly 16 years at its helm. When he took over the troubled carmaker in 1993, it was nearly bankrupt and running at a net loss. Last year, it reported 6.3 billion euros in profit, partially because of options it owned in Volkswagen.

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