Porsche Automobile Holding SE, the family-controlled luxury carmaker, announced today that non-family CEO Wendelin Wiedeking has resigned as it moves towards a merger with Volkswagen. Board member Holger P Haerter also leaves the company with immediate effect.
Media speculation has been rife over the potential resignation and payout of the man credited with Porsche's revival in the mid-1990s. Porsche finalised Wiedeking's compensation at €50 million, half of the amount speculated by the media on Monday, and installed Michael Macht, a member of the Porsche board currently in charge of Production and Logistics, as the new CEO.
Wiedeking fell out of favour with the VW chairman and grandson of the Porsche founder, Ferdinand Piech, when Wiedeking and Piech's cousin Wolfgang Porsche, chairman of Porsche, attempted to takeover VW by gradually increasing the company's shares in their bigger rival. The attempt failed with the onset of the global financial crisis and pushed Porsche into €10 million of debt. In a fast change of fortunes Porsche was forced to look to VW for help and the two companies are now moving ever closer to a merger. This is the opposite of what Wiedeking and Wolfgang Porsche had hoped for, but represents a victory for Piech.
In a separate announcement this morning the Porsche Supervisory Board also revealed it has authorised its management to finalise talks with Qatar Holding LLC over investment in Porsche. The proposal was first announced in early June but has since been fraught with difficulties linked to the potential merger between Porsche and VW.
The investment from Qatar Holding, the exact of amount of which is yet to be disclosed, is necessary for the merger to succeed as it provides Porsche with some financial relief from their current high levels of debt. The Porsche Supervisory Board has also announced plans for a capital increase of at least €5 billion in cash or contribution in kind.
All of today's announcements are intended to pave the way for the integration of the two companies, which are controlled by different branches of the founding Porsche family. Both boards are meeting in Stuttgart in an attempt to finally agree the terms of the merger, which was first announced in May but has been hampered by internal family feuding between the Porsche and Piech families.
The announcement today stated: "The ultimate goal is to lay the foundations for creating an integrated car manufacturing company from Porsche SE and Volkswagen AG." Both the Porsche and Piech families will hope this deal finally signals the end of the internal feuding that has hampered proceedings so far.