Volkswagen takes the wheel at Porsche

After years of industrial and familial battles, Europe's biggest car marker Volkswagen appeared close Thursday to taking over fellow German carmaker Porsche.

Volkswagen takes the wheel at Porsche
Photo: DPA

The programmed integration, with financial support from the Gulf emirate of Qatar, provoked the departure of Porsche chief Wendelin Wiedeking, said to be Germany’s highest paid boss.

Porsche’s supervisory board, rocked by an epic boardroom battle that fuelled a caustic family feud, reached agreement following all-night talks on a plan to merge Porsche and VW that seemed to leave the latter in the driver’s seat. Porsche currently owns 51 percent of the much bigger VW.

“We have opened the way … to the creation of an integrated group,” VW chief executive Martin Winterkorn said following a meeting of his group’s supervisory board in the southwestern German city of Stuttgart where Porsche is based.

Winterkorn is tipped to lead what could be the second biggest global auto maker behind Toyota of Japan, given the undetermined extent of US giant General Motors’ collapse.

A project approved by both Porsche and VW would see Porsche completely integrated into VW, but reinforce the former’s finances to guarantee it a minimum of independence. In practice, the VW group is to progressively buy Porsche’s auto-production unit, making it VW’s 10th brand alongside divisions like Audi, Seat, Skoda, Scania or Lamborghini.

The holding companies Porsche SE and Volkswagen AG would also merge. Within that context, Qatar would acquire around 17 percent of VW, Winterkorn said. But Qatar could also invest directly in Porsche, a move approved by that company’s supervisory board at the same time it decided on a capital increase of at least €5 billion ($7 billion).

That should allow Porsche to “negotiate (a merger) with VW on equal terms,” supervisory board president Wolfgang Porsche told around 5,000 of the company’s workers in a trembling voice.

The plan, final details of which are to be presented on August 13 following a meeting of the VW board, seals the failure of a gamble by Wiedeking and Porsche’s management to take over VW. That strategy, one of the most spectacular corporate operations in German

history, almost succeeded.

Stuttgart-based Porsche tried to acquire 75 percent of the shares in VW but had to abandon the attempt in May against a background of slumping auto markets and tighter credit conditions.

Wiedeking and Porsche finance director Holger Härter resigned on Thursday and were to receive severance pay of €50 million and €12.5 million respectively.

Wiedeking, who is believed to have earned around €80 million last year, said he would give half of his payoff to charities, including €1.5 million to “journalists in need.” He had come under sustained attack, in part through press reports that did not identify their sources, amid a furious months-long clan war between the Porsche and Piech families, which own the Porsche holding company.

Wiedeking was the principle target of Ferdinand Piech, grandson of Porsche founder Ferdinand Porsche, who invented the VW Beetle.

Piech is also president of the VW supervisory board and appeared to be the main victor in a struggle for control over both carmakers. Nicknamed “the patriarch” by German media, Piech is now well placed to pursue his dream of creating an auto group able to overtake Toyota and become the biggest in the world.

That target was confirmed once more on Thursday by Christian Wulff, regional premier of the German state of Lower Saxony, where VW is based and which owns 20 percent of the auto manufacturer.

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How a German castle has sparked civil war in Monaco’s royal family

Prince Ernst August of Hanover, the husband of Princess Caroline of Monaco, is suing his son to win back control of a German castle and prevent it from falling into public hands, a court has said.

How a German castle has sparked civil war in Monaco's royal family
Marienburg Castle in Lower Saxony pictured during the recent snow. Photo: DPA

Ernst August, 66, gave his son the fairytale-like Marienburg castle and several other properties between 2004 and 2007, but now wants them back citing  “gross ingratitude”, the district court of Hanover said in a statement on Tuesday.

It is the latest public spat to hit the aristocratic family, whosepatriarch has over the years been nicknamed “the party prince” and even “the brawling prince” over his jetset lifestyle and drunken escapades.

According to the court statement, Ernst August filed a lawsuit at the end of last year seeking to revoke the gifts of Marienburg Castle, the Calenburg manor house and a royal property in Herrenhausen.

He accuses his son, Ernst August junior, of acting against his wishes and going behind his back by offering Marienburg Castle to the state of Lower Saxony as public property – partly because of the huge costs of maintaining the mid-19th century Gothic-style building.

READ ALSO: Just one sixth of Germans want own monarchy back

The plaintiff, who lives in Austria, also accuses his son of improperly appropriating artworks and antiques owned by the family.

Ernst August senior estimates the total value of the disputed properties and items at some five million euros, the court said.

Ernst August junior, 37, told German news agency DPA that the case had no merit, saying all the arguments raised “have already been invalidated out-of-court in the past”.

He said the deal struck to transfer ownership of Marienburg Castle to the regional authorities of Lower Saxony was “legally secure”.

“There's nothing that stands in the way of the long-term preservation of Marienburg as a central cultural monument of Lower Saxony, open to all,” he said.

The court has not yet set a date for a hearing.

Ernst August senior has been feuding for years with his son over the family's royal properties.

So severe was the spat that he declined his official consent to his son's 2017 marriage to Russian-born fashion designer Ekaterina Malysheva and stayed away from the wedding.

Princess Caroline, who has been separated from her husband since 2009, did attend the nuptials.