After working for Porsche for about 25 of my 50 years in the motor industry, in July last year I felt duty bound to express my thoughts on the departure of Ferdinand Piech from the Supervisory Board of the Volkswagen Group.
He fell out then with his Porsche cousins and fellow board members because he felt that the VW business itself was performing badly and being ‘ shored up’ by the other VW Group members, in particular Audi and Porsche.
Indeed, I mentioned then that Porsche made more money making 200,000 cars than VW did making 2 million!
As expected, comments came from the hedge funds and banking pundits that the then 79-year-old had served his time and wouldn’t be missed.
So nearly 16 months on what’s been happening at VW:
Don’t mention the worldwide emission scandal – with seemingly ever increasing forecasts as to the potential cost to VW. Indeed, they have increased their cash reserves to 31.1 billion euro to help cover this.
Whilst the VW Group has increased its overall profits this year the VW business itself is struggling – big time:
Its operating profits dropped from 801m euro to 301m euro.
Production has been held up at various plants because of parts supply issues with contractors, who have had contracts terminated.
And funnily enough, VW are currently under pressure from the board and others because of ‘their massive overheads, heavy unionisation, and expensive over staffing.’
It will be very interesting to watch what happens over the coming months and years.
One just cannot envisage its production centre moving from Germany, or the unions or government permitting the kinds of headcount cuts which have been muted, but we shall see.
As well as looking for new products to stimulate much needed VW sales, maybe someone should be asking “Are there any more Ferdinand Piechs in the pipeline?”