Volkswagen’s peculiar German rules that kept takeovers at bay and Lower Saxony wielding disproportionate influence will have to be dismantled says the European Court of Justice. Ferdinand Piech’s vision of a united Volkswagen-Porsche Group looks like it has come closer to reality. The decision paves the way for a formal Porsche takeover.
So, the minnow finally gets to swallow the whale if it so desires, but maybe there’s no big hurry. The European Court ruling strengthens Porsche’s hand, but there’s no need to lay the cards just yet. Porsche appears to be in the driving seat already anyway.
But there are a number of significant questions without answers.
There are plenty of actors still in the mix. If the state of Lower Saxony retains its 20% stake, what will its attitude be? Does that matter? And what about the position of the workers and the labour unions?
If investors think someone like Wiedeking is needed to drive through operational reforms and attack VW’s uncompetitive cost structure, how accurate is that, in reality? How far are investors prepared to endorse a shake-up? Just how far is Volkswagen underachieving?
A big unknown is how Ferdinand Piech sees the cards falling and what is motivating him at heart. And just how Machiavellian is he? Is he a friend of the unions and mildly anti-reform (his apparent stance when pro-reform CEO Bernd Pischetsrieder was being briefed against to the press, prior to his eventual removal, though only after completing arduous labour negotiations)? Or is he right behind Wiedeking and in favour of Volkswagen Group aggressively delivering more benefits to shareholders – via a shake-up and reform at all levels? What’s the vision?
There are already clear signs that Wiedeking’s no-nonsense approach on the Supervisory Board has rubbed the VW works council up the wrong way. His mission appears to be to make VW leaner and better performing, with its constituent units working together better. Porsche can bring its product expertise to bear – perhaps with particular reference to Audi. And as an ‘outsider’ from one of the industry’s most financially successful companies, he has good pedigree. But how divisive could an ‘abrasive’ approach be? Or is that what VW needs – strong and single-minded management?
One thing Volkswagen probably needs more than anything else at this point is a clear statement of intent on future direction. Otherwise the unanswered questions create uncertainties and potential unrest for all stakeholders – investors and workers alike.
But the biggest unanswered question is probably this one: Will the real Ferdinand Piech please stand up?