Porsche and VW to Become One: Porsche Unable to Gain Control

Porsche and VW to integrate, put 10 brands under single roof


May 6, 2009 19:00 CET

FRANKFURT (Reuters) -- Porsche Automobil Holding SE and its Volkswagen unit will create an integrated carmaking group that unites 10 brands under one roof, Porsche said today.

The decision emerged from a meeting of the extended clan that owns Porsche and executives from VW, already Europe's biggest carmaker, to thrash out a strategy for Porsche's stalled takeover of VW.

"In the final structure, 10 brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured," a statement said.

It gave no more details for the plan that would include unspecified "capital measures."

The goal was to work out final details in the next four weeks after talks with VW's home state of Lower Saxony -- which can veto any sweeping changes at VW -- and labor leaders.

Volkswagen now has nine brands. The Porsche sports car band is held separately by the holding company owned in turn by the Porsche and Piech families.

Earlier, sources familiar with the matter told Reuters on that debt-laden Porsche had abandoned its target of reaching a 75 percent majority holding in VW.

Porsche said in early January it controls about 51 percent of Volkswagen's voting shares and had repeatedly said it wants to raise its voting stake to just above 75 percent this year should economic conditions allow.

Worsening conditions on the credit markets have made refinancing Porsche's 9 billion euros ($11.98 billion) in net debt more difficult.

It has also become tougher to finance the bid for complete financial control over VW, known as a "domination agreement." Analysts predict Porsche would need at least an additional 13 billion euros to take their stake above 75 percent.

wushuhsu - 5/6/2009 6:06:52 PM

+1 Boost

Does this mean Porsche AG can no longer exert unfair anti-consumer monopolistic behavior such as killing off promising Audi projects like the Audi R6, which was to have been a 400+ HP mid-engined six-cylinder version of the Audi R8 that would have shown the world just how much Porsche AG has been holding back its own mid-engined platform, the Cayman, in order to protect the aged and decrepit 911?

sector - 5/6/2009 10:47:50 PM

-4 Boost

I guess this will mean Porsche can't charge 1000% markups with a straight face anymore, seeing that when you buy Porsche you're buyin a Vdub :)

freeagent - 5/6/2009 11:10:57 PM

-2 Boost

Porsche needs to new strategy to leverage its history and model brands while moving into the 21st century with competitive dynamics not requiring unnatural gymastics to mask. The laws of physics will not change and the 911 platform cannot overcome the many challenges other manufactures are and will provide through inherent advantages of more stable platforms. The GTR is only the beginning to reveal the inevitability of this.

Type707 - 5/7/2009 12:35:36 AM

0 Boost

Because VW stands for "Vagina World".

0to60 - 5/7/2009 12:02:13 PM

-2 Boost

That explains it cuz most of their drivers are pussies, lol. j/k. Lot of gays drive VW however.

pepito66 - 5/7/2009 10:15:26 PM

+1 Boost

I love Porsche brand but I think they need a fast change of strategic,they need to move fast, the real prove is the new Nissan , they need to change theirs design without lost theirs identity I know is not easy but they have to do it and fast. Time change and Japanesse and Korean imitate more and more and sale with a cheaper prices some without taste buy it and represent some stolen sales for the brand. They need to check about sue and legal responsabilities for people that just copy from they original design. Yesterday was a X5 from BMW and lost the battle , then Smart and now Cayenne who is the next one. They have to stop that.

pepito66 - 5/7/2009 10:22:28 PM

+1 Boost

Probably Porsche gain control if they become one with VW, but some customer hate this and Porsche lost their exotic character and become a massive thing like Toyota or VW.
Porsche is an exotic brand and is not easy to see in every moment like others. Think about it , this present time money is over million thing but result could be fatal. Then could be late to take action.

pepito66 - 5/7/2009 10:25:25 PM

+1 Boost

The real prove is with Audi and VW , some customer refuse to pay more for Audi because they consider this like a more accesorize VW. Which is not false ??????

AlexTx - 5/8/2009 11:18:11 AM

+1 Boost

And yet Audi has less and less to do with VW....

DieselRules - 5/8/2009 3:37:20 AM

+1 Boost

Its kinda sad, but its not a big change. People forget that Ferdinand Porsche designed the VW Beetle. And that the Porsche and Peich families already controlled both companies. Even parts for my VW truck are labelled "VW-Porsche-Audi".

The downside is that VW, as big as it was, had a human side. Porsche is ruthlessly chasing the almighty dollar, like Toyota. It makes it easier to predict what they will do, but that isn't necessarily good. For example, VW wanted to build a low-volume model at Karmen's plant (where the original Ghia was built, and all "Old Beetle" convertibles) because Karmen was near bankruptcy and the area was economically depressed. It would have kept a lot of people employed. But Porsche say that will not happen, because other plants are running at less than full capacity, so they can build the cars there cheaper.
So tens of thousands will lose their jobs so Porsche can make a few more pennies on their investment. This is the problem with the auto industry. Short-sightedness.