VW CEO Steps Down

[Canadian Turbo]

Volkswagen's Bernd Pischetsrieder will step down as CEO of the automaker at the end of the year, the company announced today. "The presidium of the supervisory board of Volkswagen AG and the chairman of the board of management, Dr. Bernd Pischetsrieder, have agreed upon his resignation effective from December 31, 2006," the company said in a surprise announcement.

Volkswagen did not say why Pischetsrieder would depart the company. The news comes six months after the company's board unanimously voted to extend his contract until 2012.

Audi's current chief executive Martin Winterkorn will replace Pischetsrieder for 2007. VW told Reuters Pischetsrieder would be offered a new role within the organization.

[Canadian Turbo]

Re: VW CEO Steps Down

Not sure what this will all mena but here are some interesting related rumors

Porsche may be behind Volkswagen CEO Bernd Pischetsrieder's forced resignation, according to analysts cited by Reuters. "We conclude that his departure could be the result of significant differences on group strategy or resistance to the growing influence of Chairman Dr. Piech and Porsche CEO Dr. (Wendelin) Wiedeking," Goldman Sachs wrote in a research note.

There is speculation Porsche may be trying to secure a third seat on VW's board by raising its stake to just below 30 percent. "A combination of Porsche's shareholding and supervisory board seats, together with Piech's continuing clout at VW, may have forced VW to accept deals on the Cayenne 2 or Panamera production contracts for Porsche that were not 100 percent acceptable to VW operational management," Credit Suisse wrote.

Some analysts say Piech and Wiedeking may be plotting to swap Porsche's stake in Volkswagen for control of Audi. It's unclear what the purpose of such a move would be, but the consensus seems to be that Porsche has something up its sleeve.

[VAG_Tech]

Re: VW CEO Steps Down

Zany stuff Blair. A shift of power...

[Canadian Turbo]

Re: VW CEO Steps Down

Some impact from this switch already.....

Following the surprise resignation of Volkswagen chief executive Bernd Pischetsrieder, CEO-designate Martin Winterkorn has already announced plans for restructuring at the automaker. Winterkorn wants to see more development synergy between the company's brands, in order to reduce costs, according to Germany's Spiegel weekly magazine.

One major change will include the formation of brand groupings. Audi, Bentley, Lamborghini, and Bugatti will form a luxury/performance division, which only existed in hypothetically before. The arrangement is expected to be similar to Ford's Premier Automotive Group.

Meanwhile, the Volkswagen brand, Skoda, and SEAT will form the volume division. It's unclear how the changes will affect sharing between the VW and Audi brands, or how the four luxury brands might collaborate in the future. It's also not clear how future involvement by Porsche might affect the arrangements.

[N'Syncro]

Re: VW CEO Steps Down

Interesting... Veeeeery interesting.

[Kor]

Re: VW CEO Steps Down

Audi, Bentley, Lamborghini, and Bugatti will form a luxury/performance division... Meanwhile, the Volkswagen brand, Skoda, and SEAT will form the volume division.

Audi and VW are actually pretty tight now so I am hoping that this does not lead to more cheaply made Volkswagens versus Audis.

[Canadian Turbo]

Re: VW CEO Steps Down

The saga continues.......

VW Group’s Wolfgang Bernhard, head of the main Volkswagen brand, is expected to turn in his resignation on Thursday morning, according to early reports from Germany’s Frankfurter Allgemeine Zeitung. The shakeup at the VW Group continues, as last week we reported on Chief Executive Bernd Pischetsrieder’s forthcoming (Dec. 31) departure from the company.

With Bernhard and Pischetsrieder as free agents, we wonder how long it will be before their non-compete contracts expire and a competing manufacturer snaps them up. Ford could use a few good men.

[Canadian Turbo]

Re: VW CEO Steps Down

More info......

FRANKFURT, Germany (Reuters) -- Shares of Volkswagen AG extended gains on Thursday on talk that Porsche could eventually mount a full takeover bid for Europe's biggest carmaker, in which it is already the biggest shareholder.

VW shares rose 4 percent at one point, and by 0910 GMT were trading 2.7 percent higher at 86.50 euros, helped in part by a Goldman Sachs upgrade to "buy" from "neutral."

Goldman Sachs also raised its price target significantly to 110 euros from 77 euros.

The DJ Stoxx European car sector index gained 2 percent.

Volkswagen stock hit an eight-year high on Wednesday when Porsche announced it had raised its stake to 27.4 percent, aimed to raise its holding as high as 29.9 percent and planned to create authorized capital worth around 8 billion euros ($10.2 billion) as a possible acquisition currency.

"Clear interest in VW should set a floor on valuation, even in the event of VW brand CEO Dr Bernhard's departure, which has been widely discussed in the press," JP Morgan said, raising its VW price target to 85 euros from 65 euros.

Porsche has said its stake aims to secure close ties with a strategic partner in case a law limiting voting rights in VW is overturned. It has ruled out so far surpassing the 30 percent threshold that would make it launch a full bid.

But the market is abuzz with talk that Porsche, owned by the family of VW Chairman Ferdinand Piech, could at some stage decide to take full control of VW.

Porsche's decision to increase its equity capital by half was the most interesting part of Porsche's earnings announcement on Wednesday, Sanford Bernstein analyst Stephen Cheetham wrote in a note to clients.

"We believe this may presage a full bid by the company for Volkswagen, fulfilling Ferdinand Piech's evident wish to control the company ahead of a likely expiry of the Volkswagen law limiting any one shareholder to 20 percent of voting rights," he wrote.

"We believe this to be strongly negative for Porsche shareholders, due to material dilution and change in scope of the asset they own, but less negative for VW shareholders, since the stock price is likely to rise rapidly in anticipation of a bid," he added.

Credit Suisse acknowledged the possibility of a bid but said it continued to believe Porsche has no interest in crossing the 30 percent threshold.

"In our view, this is more posturing rather than preparation for a full bid and we still believe a holding below 30 percent satisfies Porsche's medium term requirements," it continued.

Meanwhile, shares of DaimlerChrysler rose more than 3 percent on Thursday amid market talk that Wolfgang Bernhard, the restructuring expert reported to be quitting Volkswagen, could return to DaimlerChrysler, dealers said.

"There are rumors in the market that Bernhard is moving to Daimler," one dealer said.

DaimlerChrysler declined to comment.

[Canadian Turbo]

Re: VW CEO Steps Down

More possible insight and motivation....

Porsche plans to use its new found control over the VW group to halt the rise of Bugatti. That's the stark truth emerging from Wolfsburg, where Porsche boss Wendelin Wiedeking has told the board he wants the Veyron's maker reduced to mere coachbuilder status.

The atmosphere at corporate board meetings has gone from constructive to combustible now that Wiedeking and his entourage are putting in regular appearances. In a recent session, the experts reportedly indulged in a heated debate about the future of Bugatti.

A source who was present at the meeting claims that, referring to the Veyron, the Porsche supremo called for 'these costly sand-table exercises to end'. Ferdinand Piech, who bought Bugatti and triggered the Veyron project was also in the room to hear the outburst.

Bugatti is indeed in a squeeze. It borrowed time by getting approval for the Veyron spyder, which will receive a removable roof courtesy of Webasto, but will be restricted to a less sexy 217mph top speed. The model will safeguard production at Bugatti's Molsheim factory for an extra couple of years, and help camouflage the fact that the Veyron will, in all probability, fail to meet its sales target of 300 units.

After that, the future looks uncertain. The rumored front-engined, four-door Royale supersaloon is dead in the water and the proposed £35,000 [$66,000 US] mid-engined roadster is also on the back burner. Instead, Bugatti is investigating two other alternatives - an even more extreme bespoke sports car and a brand new front-engined model priced at around £84,000 [$158,000 US].

But if Wiedeking gets his way and the cash flow gets turned off, the only short-term option may be coachbuilt one-offs. possible projects under discussion include the Royale, a 2+2 luxury coupe and a front-engined roadster.

Ordinarily, such projects could only work financially if the W16 powerplant and the DSG gearbox could be carried over from the Veyron. Trouble is, the drivetrain is no good for front-end installation, leaving the engineers to evaluate a rear transaxle layout. The four-wheel-drive hardware, electronics platform and suspension would to come from existing parts bins.

"The coachbuilt approach is true to the Bugatti heritage', explains a senior VW manager. "It's a low-investment strategy which could be quickly realized in our highly flexible French atelier. On the debt side, these bespoke cars would kick the brand further out into orbit, beyond the reach of even the very rich. We could not complete more than 20 or 30 units per year, with the asking price starting at about £2.5 Million [$4.7 Million US]. but the biggest handicap is product liability. these days, one-offs require individual type approval which is an almost impossible task'.

The option of an £84,000 front-engined car looks more promising, but it's receiving flak from in-house rivals Porsche, Bentley, Audi and Lamborghini, all of whom think it's too close to their various portfolios (think Panamera, the Continental family, the Gallardo and the new R8).

Such a car would first appear as a 2+2 coupe and then as convertible, featuring a multi-material light-weight body, a bespoke V8 engine and a state of the art rear transxle chassis. But at 5,000 units per year the car would out-punch the Gallardo, R8 and Conti GT coupe. "This is a political issue more than anything else," claims our man in Wolfsburg. "The transaxle set-up in particular is being looked at with suspicion because it promises a competitive advantage, and because we may do a deal with Maserati/Ferrari to share development costs. But if this gets the nod, we need support, not spanners in the works. Above all, Bugatti depends on help from Audi. we're fast approaching crunch time."

[N'Syncro]

Re: VW CEO Steps Down

I'll put money on it that VW will be damned if Bugatti is going to be quashed by Porsche. They've put wayyyyy too much money into building the brand lately.


I can't blame Porsche though for trying. If they just sit around, they're going to start losing bigtime market share to VW's brands... Audi's are getting more expensive and sportier (ie. R8), and the 'supercar' brands like Lambo are making cheaper cars (ie. Gallardo)

[Canadian Turbo]

Re: VW CEO Steps Down

The latest.....

Porsche has decided against making a takeover bid for Volkswagen, according to a report by Germany's weekly Focus magazine. The company apparently wishes to avoid the financial risk associated with such a move.

Last week, Porsche said it had increased its stake in VW to 27.4 percent. The automaker's supervisory board also gave the go-ahead for an increase to 29.9 percent. Under German law, Porsche would have to launch a takeover bid if exceeds a 30 percent holding.

Despite rumors to the contrary, Porsche spokesman spokesman Anton Hunger said "there are definitely no plans at the moment to raise the stake of Porsche in VW to 30 pct or above," according to AFX News.

[Canadian Turbo]

Re: VW CEO Steps Down

Some fresh news on VWs new direction....

Volkswagen's new CEO Martin Winterkorn intends to fill "lucrative market niches" with new models over the coming years. The plan aims to boost profit while shrinking capacity.

"The Volkswagen brand is far from tapping its full potential," Winterkorn said in a letter to employees obtained by Bloomberg.

It's unclear what niches Winterkorn plans to fill, but the forthcoming Scirocco and Tiguan could arguably fall into this category. Oddly, Winterkorn is rumored to have considered canceling the Passat coupe, Scirocco and Tiguan projects, but too much had already been invested in their development.

Several media reports have indicated Winterkorn is not satisfied with the three vehicles, but it's not known what his specific concerns are. Many enthusiasts criticized the Scirocco for looking too much like a hatchback and not enough like a coupe.

Winterkorn is reported to have cancelled the launch of the Passat coupe, originally slated for the Geneva Motor Show. A lack of design creativity might be a concern with all three models, given Winterkorn's upscale niche market ambitions.

As previously reported, Winterkorn asked VW's new design chief, Walter de'Silva, to rework all of VW's upcoming models. De'Silva was previously head of design at Audi, until being transferred to VW last month.

While at Audi, de'Silva was very critical of VW's recent decision to copy Audi's single-frame grille and the exterior similarities on VW vehicles, according to Automotive News.

Under Winterkorn's direction, de'Silva's job is now to create distinction between VW, Audi, Seat, Bentley, and Lamborghini. How Volkswagen will target upmarket niches like those occupied by Mercedes-Benz while not conflicting with Audi remains to be seen.

[Tuna]

Re: VW CEO Steps Down

..... given Winterkorn's upscale niche market ambitions.

I was really hoping all that Pheaton business was over with and they would realize that's not their market. Kind of sounds like he's bound and determined to make VW a luxury car maker.

[Mr. Burns]

Re: VW CEO Steps Down

well... their prices have been headed in that direction for a long time now.

[Kor]

Re: VW CEO Steps Down

Sometimes I dunno if VW decision makers even use their brains at all. I think any of us could come up with an exciting and practical plan for VW that would sell vehicles and regain customer support better than what we have seen.