KEY POINTS:
Volkswagen chief executive Bernd Pischetsrieder's decision to resign has had many analysts questioning the role of VW chairman Ferdinand Piech and Piech's company, Porsche.
"We conclude that his departure could be the result of significant differences on group strategy or resistance to the growing influence of chairman Dr
Piech and Porsche chief executive Dr (Wendelin) Wiedeking," Goldman Sachs said in a research note.
VW surprised equity markets not just by announcing that Pischetsrieder would step down by year's end to be replaced by his boss's closest ally, Audi chief executive Martin Winterkorn, but by its refusal to give a reason.
At the centre of the affair stands Piech, VW's powerful chairman and former chief, sometimes referred to in the German media as The Godfather. Piech is the grandson of VW Beetle developer Ferdinand Porsche.
He has not indicated if he will seek to retain a seat on the board. A power struggle over Porsche's influence at VW could have prompted Pischetsrieder to leave.
When Porsche first grabbed a stake in VW last year it demanded boardroom representation in line with its 20 per cent holding and Porsche chief Wiedeking and his finance head, Holger Haerter, joined the VW supervisory board.
Since Porsche has never ruled out raising its interest in VW to just below the threshold at which the sportscar maker would have to launch a public takeover offer, Piech could be pinning hopes on Porsche consolidating his power by receiving a third seat if it raises its stake to just below 30 per cent.
"A combination of Porsche's shareholding and supervisory board seats, together with Piech's continuing clout at VW, may have forced VW to accept deals on the Cayenne 2 or Panamera production contracts for Porsche that were not 100 per cent acceptable to VW operational management," Credit Suisse said.
VW builds the Cayenne SUV for Porsche at a plant in Slovakia and has agreed to provide bodies for the four-door Panamera.
Citing a recent decision by Porsche shareholders to pool their holdings into two Salzburg-based vehicles that together own Porsche's VW stake, Morgan Stanley believed Piech's co-owned company has longer-term interests in Volkswagen - described as "stage two" of Porsche's growing influence over VW".
Analysts also speculate that Porsche may attempt to buy Volkswagen outright, or at least some 58 per cent in free float. Goldman estimated that Porsche could theoretically pay between €89 and €123 (an average of $300) for each ordinary VW share, and such a plan could have led to Pischetsrieder's abrupt departure.
"We believe this could be the prelude to a potential finalisation of Porsche's intentions towards VW," the bank said. Some analysts have focused on whether Piech and Wiedeking may be plotting to swap Porsche's stake in Volkswagen for control of Audi, where the VW chairman was once chief executive.
Often territorial toward his successors, the Porsche scion saw to it that successors Herbert Demel and Franz-Josef Paeffgen resigned as Audi chiefs, and ultimately sent his chief lieutenant, Winterkorn, to look after the pearl of the Volkswagen empire.
Insiders say Pischetsrieder was anxious to curtail the growing influence of Porsche at VW and supported a plan to get truckmaker MAN to take a 10 per cent stake in VW, and trump Porsche's 21.2 stake in VW.
That was too much for Piech, the man who really runs VW. In a stormy boardroom session, everything came to the forefront, and 12 months of missteps cost Pischetsrieder his job.
Max Warburton, a European auto analyst at UBS in London, said it was simply a matter of Piech and Porsche wanting more control of VW and that Pischetsrieder was the main obstacle.
- REUTERS
