Porsche Chief Executive Steps Down

11:19, 23 July 2009
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In a sign that the long tug of war between Volkswagen and Porsche is almost over, the sports car maker announced early Thursday that Wendelin Wiedeking, Porsche’s longstanding chief executive, would step down, clearing the way for a merger of the two companies, according to New York Times.

The announcement, made after an extraordinary meeting of Porsche’s supervisory board that began late Wednesday and lasted into the night, said Mr. Wiedeking would be replaced by Michael Macht, another board member until now in charge of production and logistics.

Holger Härter, chief financial officer at Porsche, will also resign immediately, according to the announcement.

Mr. Wiedeking’s resignation comes as Porsche prepares to sell a stake in its automotive unit to Volkswagen, a move that he opposed although it would help the sports car maker pay off debt of about 9 billion euros, or $12.8 billion.

“In the last weeks Wiedeking and Härter have come to the conclusion, that the further strategic development of Porsche SE and Porsche AG is better off, if they are not on board as acting persons,” the statement said. “They both see that step as a significant contribution to the appeasement of the situation and to support the forming of an integrated car manufacturing company.”

Porsche’s debt is in large part due to its purchase over the last four years of 51 percent of the shares of Volkswagen, the largest carmaker in Europe, and it has pushed Porsche to seek out new investors, including the Qatar Investment Authority, the country’s sovereign wealth fund.

In a separate statement stemming from the same meeting, Porsche said it planned a capital increase of 5 billion euros to prepare for joining Volkswagen, whose board is expected to meet Thursday.

The two automakers, controlled by the related Porsche and Piëch families, agreed in early May to combine, but the details of the deal have eluded them until now.

Later that same month, Ferdinand Piëch, the head of Volkswagen, criticized Mr. Wiedeking and Mr. Härter, who orchestrated Porsche’s unusual purchase of Volkswagen stock. The men held some responsibility for Porsche’s present financial position, Mr. Piëch said.

Mr. Weideking, who first joined Porsche in 1983, spent nearly 16 years at its helm. When he took over the troubled carmaker in 1993, it was nearly bankrupt and running at a net loss. Last year, it reported 6.3 billion euros in profit, partially because of options it owned in Volkswagen.

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