VW CEO to meet key board members amid leadership turmoil
Volkswagen AG Chief Executive Officer Martin Winterkorn appeared before the leadership committee of the carmaker's supervisory board on Thursday to fight for his job amid a power struggle with Chairman Ferdinand Piech, according to people familiar with the matter.
The supervisory board group, comprising Piech and five other members, was set to discuss a proposal from the chairman for the future leadership of Europe's largest auto manufacturer, said the people, who asked not to be identified as the talks are private. A Volkswagen spokesman said the meeting, which took place in Salzburg, Austria, had ended. The company declined to comment further.
"This showdown is absolutely unprecedented," said Arndt Ellinghorst, an analyst with Evercore ISI in London. "They have to solve this as soon as possible."
Winterkorn's future was called into question after Piech told Der Spiegel magazine on Friday that he had distanced himself from his former confidant and no longer wants him as the next chairman. The dressing-down came without explanation and was a surprise blow to an executive that has led the company to record profits and put it within grasp of overtaking Toyota Motor Corp. as the No. 1 in the industry.
The committee usually prepares the meetings of the full 20- person supervisory board, which has the power to hire and fire executives. In addition to Piech, who is also a member of one of the two families that control VW, the group comprises works council chief Bernd Osterloh; his deputy, Stephan Wolf; Berthold Huber, representing the IG Metall union; Wolfgang Porsche, Piech's cousin and a representative of the other shareholder family; and Lower Saxony Prime Minister Stephan Weil.
Piech, who turns 78 on Friday, has had key power players of VW turn their back on him since the comments. Osterloh and Weil have stated their support for Winterkorn, and Porsche has said his cousin's comments aren't backed by the entire family. Combined, Winterkorn's supporters could block an effort to fire him.
Still, without the backing of the chairman, who has steered Volkswagen for more than two decades, Winterkorn will struggle to maintain his authority at the manufacturer, which owns 12 brands and employs more than half a million people. Matthias Mueller, head of the Porsche nameplate, is seen as the leading candidate to step in as CEO because he has the support of the Porsche and Piech families.
The two clans, which are both descendants of VW Beetle creator Ferdinand Porsche, are VW's top shareholder, controlling 50.7 percent of VW's common stock. Lower Saxony is second, with 20 percent, and the Qatar Investment Authority sovereign-wealth fund is third, with 17 percent.