HAMBURG (Reuters) – People with knowledge of the situation say that Volkswagen’s (ETR:VOWG p) controlling shareholder families want to keep Europe’s biggest automaker on a tighter leash and have more say in strategic decisions. This is a power play before Porsche is set to go public, and it’s clear that this is what they want.
They said that the Porsche and Piech families, who run the holding company Porsche SE, which owns most of Volkswagen’s voting rights, hope to bring the group back to calmer waters after a rough time under CEO Herbert Diess.
Someone who knows what the families are thinking told Reuters, “They want to keep a closer eye on how the strategic guidelines are being used.”
Volkswagen made a lot of progress toward electrification while Diess was in charge, but his direct style caused problems inside the company that sometimes overshadowed his achievements and put the families’ patience to the test, sources said.
So, they plan to run a tighter ship because of this.
“The families are actively involved, which is something people have long thought they couldn’t do,” said a second source.
The bigger influence has already led to the choice of Oliver Blume as the next CEO of Volkswagen. This has upset some investors because Blume will also stay in charge of Porsche AG, even after the company plans to go public.
People say that Blume, who has been in charge of the Porsche and Piech families’ namesake car company, Porsche AG, since 2015, is the “preferred candidate” of the Porsche and Piech families and will push through the long-awaited IPO.
Porsche SE and Volkswagen both said they had nothing to say.
The IPO is important for the families because they would become direct shareholders of Porsche AG again. In 2009, Volkswagen bought the company that made the famous 911 car after Porsche AG tried and failed to buy Volkswagen instead.
Hendrik Schmidt, an expert on corporate governance at DWS, which owns shares in both Volkswagen and Porsche SE, said that the structure of the IPO mainly serves the families’ goal of getting a tighter hold on Porsche. The families won’t change their minds about this plan.
The still-to-be-confirmed agreed structure of the IPO would give the Porsche and Piech families a blocking minority in the sports car brand that their ancestor Ferdinand Porsche started in 1931.
Manuel Theisen, a retired professor of business administration at Ludwig-Maximilians-University in Munich and an expert in corporate governance, said this was a way to take back some of the families’ power.
“Power is the main reason.”
