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Business News/ Home Page / Volkswagen chairman Ferdinand Piech resigns as power struggle backfires
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Volkswagen chairman Ferdinand Piech resigns as power struggle backfires

Ferdinand Piech, 78, will step down from all posts at the German auto maker with immediate effect

Ferdinand Piech’s term as chairman of VW’s supervisory board was due to expire in April 2017. Photo: AFP (AFP)Premium
Ferdinand Piech’s term as chairman of VW’s supervisory board was due to expire in April 2017. Photo: AFP
(AFP)

Frankfurt/Berlin: Volkswagen AG chairman Ferdinand Piech resigned after more than two decades atop Europe’s largest car maker following his failed attempt to oust chief executive officer Martin Winterkorn.

Piech, 78, will step down from all posts at the German auto maker with immediate effect, the Wolfsburg-based manufacturer said in a statement on Saturday. The former CEO’s wife Ursula is also leaving the board. Piech’s term as chairman of VW’s supervisory board was due to expire in April 2017.

“The members of the presidium have realized unanimously that on the background of the last weeks the mutual trust needed for successful cooperation isn’t given any more," VW’s top supervisory board group said.

The board’s leadership committee backed Winterkorn on 17 April, saying he’s the “best possible" head of the company. The statement was prompted by Piech’s remarks in a magazine interview expressing doubts about the CEO. The six-member body, made up of Piech and five others, proposed extending Winterkorn’s contract beyond 2016 after the chairman found himself isolated in a push to force the CEO out.

Piech told Der Spiegel in an article published online 10 April that he had distanced himself from Winterkorn, 67, and no longer wants him as the next chairman. The dressing-down of his former confidant came without explanation and sent shockwaves across Germany’s largest private employer.

Winterkorn, who has led Volkswagen to record profits and put it within grasp of overtaking Toyota Motor Corp. as the world’s biggest car maker, appeared at a meeting of the committee in Piech’s hometown of Salzburg, Austria, on 16 April to fight for his job.

Board’s powers

The group usually prepares the meetings of the entire 20-person supervisory board, which is comprised of voting-shareholder and labour representatives and has the power to hire and fire executives, in addition to making other major corporate decisions.

The full board is scheduled to convene in a regular session the day before Volkswagen’s annual shareholders meeting on 5 May. Any ruling on Winterkorn’s term isn’t likely before early 2016. In Germany, top executives’ contracts are generally only extended in their final year.

In addition to Piech, who is also a member of one of the two families that control VW, the leadership committee has been made up of Stephan Weil, prime minister of the German state of Lower Saxony; works council chief Bernd Osterloh and his deputy, Stephan Wolf; Berthold Huber, representing the IG Metall union; and Wolfgang Porsche, Piech’s cousin and a representative of the other shareholder family.

The combined Porsche-Piech clan controls a 50.7 percent voting stake in VW through family-owned holding company Porsche SE. Lower Saxony, where VW is based, is the second-largest shareholder with a 20% stake, followed by Qatar with 17%.

Huber, who was deputy chairman, will take over Piech’s responsibilities as supervisory board chairman until a successor has been found, VW said. Bloomberg

Elisabeth Behrmann in Munich contributed to this story.

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Published: 25 Apr 2015, 10:58 PM IST
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