Planet 9

thewizardofaz · #1 04-20-2009, 10:57 AM

"Automaker Porsche's takeover of the much larger VW Group seemed ingenious at the time. But then the crisis came along, bringing a sharp decline in car sales. Now Porsche is finding it increasingly difficult to make enough money to cover the interest on its billions in loans."

Interesting article
The VW Debt Trap: Has Porsche Bitten Off More than It Can Chew? - SPIEGEL ONLINE - News - International

Nitro8472 · #2 04-20-2009, 07:17 PM

Damn, these are some scary thoughts for Porsche!

**K-Man S** · #3 04-20-2009, 09:28 PM

An interesting article for sure and it will be interesting to see how it is resolved. My initial concern will be that after the Panamera launches that we won't see much technology or engineering advancement in Porsche models in the short term if some of these engineers are let go or reassigned, or worse we see VW substitutes inserted where Porsche can't afford to develop or implement its own solution. Not that there is anything wrong with VW solutions per se, but that would signal a fundamental shift and possibly have an impact on future sales and future Porsche design/engineering independence.

**DaveC** · #4 04-21-2009, 06:41 AM

The 914, 924, 944, and 968 all had VW or Audi derived parts. If there is going to be any such "integration" of VW/Audi w/ Porsche it will be at the entry end of the line up, not the top.

**K-Man S** · #5 04-21-2009, 06:43 AM

Dave you know those 944/968 guys aren't going to like being called "entry" level.

silberrosa · #6 04-21-2009, 07:10 AM

Sorta like the pot calling the kettle black...................

markstudy · #7 04-21-2009, 07:22 AM

Originally Posted by K-Man S

My initial concern will be that ....that we won't see much technology or engineering advancement in Porsche

Yes, it does look bad when the Financial guys in charge, say that the R&D is not a priority during this "chess game".... and an easy target for cutting millions that needs to go towards servicing the interest payments on their loans.

I hate when cost cutting becomes the focus of a company that is suppose to be about engineering.

**LA Boy** · #8 04-21-2009, 08:30 AM

You know what this means. It means that we all have to do our part and go out and buy some new Porsches so they can afford to pay the interest on the loans. It is the least we can do.

Kwaaiman · #9 04-21-2009, 08:34 AM

2 interesting scenarios:

1 Porsche cut costs to service their debt and re-invents Porsche AG as a global manufacturer, manufacturing smaller engined vehicles to reduce their CO2 count, with VW parts and technology. Their sportscars are only offered with PDK.

2 Porsche sells Porsche AG to the VW Group and pay of their debt. It remains a small niche sports car manufacturer (like Lamborghini) and the CO2 count is absorbed in the larger group. VW still offer manual transmissions.

old blue · #10 04-21-2009, 10:47 AM

interesting scenario:

"Porsche sells Porsche AG to the VW Group and pay of their debt. It remains a small niche sports car manufacturer (like Lamborghini) and the CO2 count is absorbed in the larger group. VW still offer manual transmissions."

AY, MUY LOCO!

thewizardofaz · #11 04-21-2009, 01:53 PM

" The 914, 924, 944, and 968 all had VW or Audi derived parts. If there is going to be any such "integration" of VW/Audi w/ Porsche it will be at the entry end of the line up, not the top." Not quite. When I was in Germany in the period 1974-78, the 914 was neither sold nor serviced as a Porsche, but as a VW. IIRC there were two versions, both with the rolling chassis built by Karman, one of which was essentially a VW with a 4-cylinder engine and suspension, and the second version had Porsche suspension and a flat six, but both were sold as Porsches in the US.

**Bodhii** · #12 04-22-2009, 08:35 PM

This was mentioned im the graphic above.

Volkswagen eyes move on Porsche

By Daniel Schäfer in Frankfurt

Published: April 22 2009 23:33 | Last updated: April 22 2009 23:33

Volkswagen is considering an audacious bid for Porsche’s automotive business, in another extraordinary twist in the corporate saga surrounding Germany’s most famous car dynasty.

Several people close to the situation said VW’s management was weighing the option of buying Porsche AG, in a move that would bring relief to the highly indebted parent Porsche SE holding company.
EDITOR’S CHOICE
VW’s Piëch steers towards Porsche deal - Apr-22
VW profits fall 74% in spite of truck sale - Apr-22
John Gapper: Porsche travels east and gets longer - Apr-22
VW hedges give Porsche €6.8bn windfall - Mar-31
Porsche to cut costs amid drop in sales - Jan-30

This would turn upside down Porsche’s audacious takeover of VW, which started three and a half years ago. VW is Europe’s largest car company whose turnover is roughly 15 times as great as Porsche’s.

“The tail would finally stop wagging the dog,” said a person familiar with the thinking of VW’s management.

Wendelin Wiedeking, Porsche’s chief executive, has in the past repeatedly locked horns with VW’s management and works council.

The plan emerged as shareholders were set to convene at VW’s annual meeting on Thursday.

The move would allow Ferdinand Piëch, grandson of Ferdinand Porsche, the founder who designed the VW Beetle, to integrate the sports carmaker into VW as its 10th marque and thus finalise his task of reuniting his family heritage.

The Porsche and Piëch families jointly own Porsche SE, the holding company as well as 50.76 per cent of VW’s shares. The holding company would keep keep the VW stake after such a deal.

The price, which is facing many obstacles and could still be dropped in favour of another solution, came after Porsche had revealed it had net debt of €9bn.

Analysts and bankers have argued that Porsche could run into difficulties servicing its debt.

A Porsche spokesman, who said he was unaware of the takeover plans, said the €280m it was about to receive in VW dividends and its operating profit would be enough to make its interest payments this year.

Porsche has reaped huge profits in the past years from controversial VW option trades. It made €6.8bn, more than double its revenue, from its VW takeover in the past six months alone. However, analysts said most of these profits were paper gains and could not be easily converted into cash.

Arndt Ellinghorst, analyst at Credit Suisse, said it would be the most logical solution to use VW’s €10.7bn net cash from its automotive division to buy the sports car business.

People close to the situation warned the plan was still facing many obstacles, such as the question of Porsche’s valuation. Estimates vary from €6bn to €9bn.

Another question is if the regional state of Lower Saxony, which owns about 20 per cent of VW, would support such a move.

old blue · #13 04-23-2009, 02:37 PM

April 24, 2009
Porsche Looks at Restructuring VW Relationship
By CARTER DOUGHERTY

http://www.nytimes.com/2009/04/24/bu...sche.html?_r=1

**Santa Fe** · #14 04-23-2009, 02:57 PM

and denial Porsche denies rumored plans to sell itself to Volkswagen and swap CEOs

Nitro8472 · #15 04-24-2009, 03:13 PM

I really hope its not true!!!

Porsche, Piech Families Said to Sell Car Assets to VW (Update2) - Bloomberg.com

Six_Cylinders · #16 04-27-2009, 03:34 PM

For the past few days the German financial press has been contemplating the long term effects of the latest internal disputesinvolvingVolkswagen and Porsche, particularly a family power play beng staged by Ferdinand Piëch, Ferdinand Porsche's grandson.

Apparently Porsche has bitten off more than it can digest financially and has taken on an excessive amount of debt at high interest rates from a consortium of at least 15 banks that they have essentially pissed off earlier, all for the sake of buying up more shares of Volkswagen and faking out speculators in VW stock. Alternatively, Volkswagen could easily buy out Porsche and take operative control of it instead, which would make more sense from an overall financial perspective because less of the earned profits would be going to the banks in interest charges. Such a move would also enhance Piëch's personal ambitions (more strongly associated with VW and Audi, but lives in Salzburg), to the detriment of his cousin Wolfgang Porsche (more strongly associated with Porsche in Stuttgart, but lives in Munich).

But Volksawagen doesn't really need to own Porsche, whereas Porsche is very much dependent on Volkswagen for its long term success. According to media reports in Handelsblatt and Der Spiegel, Porsche chief Wiedeking and the financial officer who planned th would-be takeover of Volkswagen are on their way out as soon as a resolution s reached before the first half of the year. The result will likely be a de facto takeover of Porsche by Volkswagen, which is currently doing well with respect to overall sales, while those of Porsche are crashing. Porsche would thus lose its independence.

It's hard to make specific predictions about likely Porsche model policy in the future, particularly with regard o the Cayman, so Porsche fans should stay tuned to how things develop. The future producer of the the Cayman in 2012, Magna Steyr of Graz, Austria, is said to be the favored bidder for Opel, which will apparantly be spun off from General Motors soon. In any case, it will be interesting to see how events develop during the shake-up underway in the industry.

Sex_Zylinder

**DaveC** · #17 04-27-2009, 03:48 PM

Does this suggest that Dr. Wiedeking overplayed his hand? There has always been tension between him and Dr. Piech, seems as though the wunderkind's fortunes have run out. Let's hope that the Boxster/Cayman series doesn't succumb to the squabbles between Porsche and VW that irrevocably damaged the 914. Well times change, one day you're up, the next you're out. Isn't there a holding company, Porsche SE, that will still be run by the Porsche family regardless of the position of Porsche AG, vis a vis VW? Thanks for the posting, very interesting.

Nitro8472 · #18 04-27-2009, 06:15 PM

Damn, the scary thoughts are materializing

philipwitak · #19 04-28-2009, 03:12 PM

i read something interesting the other day on the truth about cars website, which picked it up from the german magazine der spiegel - but have seen nothing since - regarding the fate of porsche chief wendelin wiedeking. apparently, he and a top colleague are on his way out after serious financial problems surfaced at porsche - something i never would have expected in a thousand years given all the rosy news regarding its profitability lately.

has anyone else found any additional information on this topic that might elaborate on the situation and either confirm or refute this initial report?

http://www.thetruthaboutcars.com/por...-on-death-row/

Machtkampf bei Porsche: Piëch-Clan will Wiedeking binnen Monaten schassen - SPIEGEL ONLINE - Nachrichten - Wirtschaft

Six_Cylinders · #20 05-02-2009, 06:19 AM

According to the latest report, the extended Piëch and Porsche family circle of Porsche owners will meet in Salzburg this coming Wednesday to decide whether to sell the company, Porsche AG, to Volkswagen for 11 billion Euros, according to a concept worked out by Dr. Ferdinand Piëch and Volkswagen head Dr. Martin Winterkorn (previously head of AUDI). After such a sale the families would be debt free. Porsche's current head, Dr. Wiedeking, and his chief of finance would thus be replaced by Winterkorn and VW head of finance, Hans Dieter Pötsch. The family meeting is being arranged because there was no agreement at a recent conference in Weissach on how to proceed. Wiedeking would prefer to keep the company independent, as do many of the Porsche employees, and he has recently distanced himself from his ambitious plans to ultimately take a 75% stake in VW. The head of the operating council is upset at the familes and has hinted at future measures to by employees to keep the company independent if the families were to decide on selling the company.

Source (in German):
Porsche: EigentÃ¼merfamilien beraten Ã¼ber Verkauf - Wirtschafts-News - FOCUS Online

Stay tuned for more high drama in the days ahead.

Sex_Zylinder