It’s like a high stakes storyline you’d see on the big screen, a company chairman secretly plots to oust the CEO while pretending to support him. Only this takeover plot is one that’s being played out in real life at the top of the Volkswagen chain.
Technically speaking, Piech resigned after the board demanded he do so or suffer being booted out by a vote. The showdown reportedly went down at an airport of all places, just down the road from VW’s headquarters. The whole incident occurred after news leaked out last week that Piech had been lobbying family members behind the scenes to install Matthias Mueller, the chief executive of Porsche, at the helm of VW. Mueller had been rumored to be in Piech’s good graces and his choice for replacement.
No one is publicly commenting about the resignation, which ends several weeks of public mudslinging that’s left Europe’s largest automaker is in turmoil. Reuters reported a source close to one of the VW board’s labor representatives as saying, “it was one of the straws that broke the camel’s back”.
Berthold Huber, the former head of Germany’s influential IG Metall trade union, takes over as acting chairman following Piech’s departure, for now. The question is whether Winterkorn, who’s been supported by labor unions, can still take over following all of the political upheaval. The unions will play a big role in what happens next.
“Nothing works at VW without the unions – it’s a simple but sad truth. Winterkorn has won this showdown but very likely at the cost of becoming more vulnerable to the influence of labor,” said analyst Juergen Pieper of Bankhaus Metzler, speaking to Reuters.
Piech’s ousting ends an era for Volkswagen. He ruled VW with an iron fist and reportedly made no apologies for ending the careers of executives he didn’t like and making controversial decisions.
Piech had criticized Winterkorn for VW’s lack of performance in the United States where it it seemingly sometimes just doesn’t get its customers. Case in point, the automaker made the mistake of using drink holders that were too small for jumbo-sized cups. Under Winterkorn, VW has also struggled to engineer a low-cost car or make significant inroads in southeast Asia and Latin America.
Photo Credit: Volkswagen