Porsche chief in line of VW fire

Volkswagen’s powerful works council will summon thousands of employees to make a show of might in protest against Wendelin Wiedeking, the Porsche chief executive, at a VW supervisory board meeting on Friday.

It will be another twist in the power struggles that have erupted since Porsche bought a stake in its large rival, which led to Mr Wiedeking’s taking a seat on the board.

He has already suffered a string of nerve-testing weeks, during which rumours have spread in the German media that he would be ousted as head of the sports carmaker. Porsche has denied this.

At the heart of the conflict lies a clash of cultures between a family-owned company and a large corporation – a clash that recently has become a common feature of corporate Germany.

Porsche, owned by the billionaire Porsche and Piëch families, stunned markets three years ago by taking an 18 per cent stake in Volkswagen, a company with turnover about 20 times as great.

Subsequently, the sports carmaker built this stake to 31 per cent now. It plans to buy a majority stake in VW by the end of the year.

As such, Porsche’s move was the precursor of this year’s takeover battle for Continental, the German car parts and tyre maker. After a fierce contest, Schaeffler, the family-owned southern German ball-bearings maker, bought almost half the shares in its much larger listed rival.

As Porsche’s grip over VW has become tighter, so the rifts between the companies have widened.

Bernd Osterloh, Volkswagen’s head of works council, had lashed out against Porsche’s management, saying they were “amateurs” and “arrogant upstarts”. But Mr Wiedeking has also fanned the flames by criticising Volkswagen’s management for some of their decisions.

People close to both companies say the relationships between Mr Wiedeking and Martin Winterkorn, Volkswagen’s chief executive, are far from easy.

Mr Wiedeking is used to running a comparatively small family-owned business with short decision-making processes and a “can do” culture.

But he did not make many friends with his tone at Volkswagen, a company as proud but much more corporate and complicated to manage than Porsche.

The situation is more complicated because it is far from clear how much backing Mr Wiedeking has from one of his two main shareholders, the Piëch family.

Whatever the outcome of the latest struggles, Mr Piëch – regarded, like Mr Wiedeking, as a strong-minded manager – is in the process of creating a car and truck empire ranging from Porsche and Volkswagen to Audi and truckmaker MAN.

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