Porsche SE must trim debt before the sports-car maker can be incorporated into the Volkswagen AG structure as part of steps to combine the two automakers, Volkswagen chairman Ferdinand Piech said.
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“Volkswagen won’t solve” Porsche’s net debt, which tripled over six months to EUR9bn (US$12.2bn) as of 31 January, Piech told reporters late yesterday when he made a surprise appearance at the media launch of the fifth generation Polo in Sardinia, Italy.
“That’s very logical,” Piech added. “I can’t imagine that Volkswagen will shoulder someone else’s risk.
The Piech and Porsche families agreed on 6 May to create a combined company with VW, ending a battle that started more than three years ago to increase Porsche control by acquiring additional VW shares. Porsche owns about 51% of Volkswagen.
“An integrated automaker with Volkswagen and Porsche has the potential – more than any other company – to become the champion of international carmaking,” CEO Martin Winterkorn told reporters during the presentation.
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By GlobalDataIncorporating Porsche into VW is one of three possible “solutions” that both carmakers will study until early June, when the structure of the joint carmaker is due to be decided on, Piech said.
“What’s preferred is something that works quickly and without much pain,” he said when asked to outline how the two carmakers could be combined. “A merger under current conditions would cost Volkswagen certain rights.”
He added it was important to protect VW’s credit ratings. “That’s why we will seek to avoid taking wrong steps.”
Piech said he preferred that no external investor be allowed to bid for a stake in the integrated car group, which would be based in Wolfsburg.
“I cannot imagine good terms either for Porsche or for VW if a third party comes into play,” he said. “Things have to be put back in order with our own tools.”
Piech said chief financial officer Holger Haerter and CEO Wendelin Wiedeking were partly responsible for Porsche’s situation.
“Volkswagen CFO Hans Dieter Poetsch is more worthy of credit” than Haerter, Piech said, while Wiedeking has his backing “for the time being.”
Piech backed Winterkorn as the best leader for Volkswagen but said he couldn’t imagine how Porsche boss Wiedeking would be willing to become a division chief at Porsche in a new joint company and practice “humility” after being used to “marching through” his career.
