Behind VW's Board Turmoil: A Chariman's Desire for Control

[Michael]

Today I was walking around work and saw that The Wallstreet Hournal was talking about VW's falling sales. I will attempt to quote and summarize some of the facts. If you wish to view this please pick one up, or check to see if at the website you can find it.

(April 19, 2006)


Note: There is a graph being shown that shows that from 2001 to 2005 profits have dropped. This is my interpretaton of the chart

2001-3.5 Billion
2002-2.9 Billion
2003-1.0 Billion
2004- 9.1 Million
2005- 1.0 Billion

Written by: Stephen Power
WOLFSBURG, Germany-Last, September, during a meeting of Volkswagon AG's supervisory board, some directors puzzled over a steep jump in the company's share price. Ferdinand Piech, VW's chairman, listened carefully but said nothing.

Unbeknownst tomost of his colleagues, Mr. Piech had been quietly advising German SPorts-car maker Porsche AG on a plan to make it VW's largest shareholder. Mr. Piech is a big shareholder of POrsche, a seperate company and also sits on its supervisory board, which four days earlier had voted to authorize the buy-up. the move would bolster Mr. Piech's influence at VW, whose roots date to the 1930s, when his grandather designed the original "people's car."

SOme VW board members were "not happy" Mr. Piech kept his knowledge of Porsche's plan to himself, Mr. Piech says in a recent interview. He says he wanted to forestall leaks that might have pushed the share price even higher; while helping VW shareholders, that would have also raised Porsche's purhcase price. he adds: "By law, its allowed, what was done."

Four years after retiring as VW's cheif executive officer, and after his influenece appeared to be on the wane, Mr. Piech is still battling to impose his will on the world's fourth-largest car maker. A towering figure in the auto industry and a member of one of its most storied dynasties, Mr. Piech has clashed with one of VW's biggest shareholders, publicly secondguessed his succesor as CEO and sided with the company's labor representatives......



Source: Wallstreet Journal April 19, 2005


Please excuse any typos. I was trying to type up what I read so I was copying exacting from the text.

[Brookside]

The article is pretty open to interpretation- lowering profits and higher share prices...???...something doesn't make sense with this ecquation- maybe one of the other members could fill us in...
(I think AlxAMG is a finance manager)...but I can't figure out what's going on.

If I were to speculate, based on the WSJ info, Dr. Piech is maneuvering himself back into the picture. Not good news. As he's gotten older he seems to bring about a poisonous attitude with those that deal with him.
We talked about this on another thread- some say that Piech was/is a strong leader inside an organisation that is populated by German nobility, state bureaucrats and old-line labor leaders. Others, like myself, believe that he overstayed his usefulness and turned into a messianic tyrant whose business acumen is unstable.

[Michael]

I would say so myself, but I am not to intune with what is going on in the economy of Germany, the businesses there, the companies in reference to auto-makers, and what is going on between this guy and VW. Nevertheless, it seems like he needs to be put in place or something like. Either way I guess he is there for good? Who knows.

[Alx]

Well I am a finance manager, but my job isnt in stocks and company shares... lol.

Seem's like the guy is trying to raise interest in the company to raise prices per share, which he owns (probably many) everything is done for a profit, so that for sure is the wisdom behind it. Article is pretty vague. Would need more detail to put my finger on it...