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Intrigue and backstabbing, Porche billionaires will become the most powerful family in the world of cars

2022-10-13 20:43:43Biznes SHKRUAR NGA REDAKSIA VOX
Intrigue and backstabbing, Porche billionaires will become the most powerful
A Porsche car

Forget the Quands, owners of BMW, the prestigious Agnellis of Fiat, or the American Ford clan. The billionaire descendants of the man who created Porche are just one step away from being the most powerful family in the car world. Who will lead the German luxury car clan after the departure of the current patriarch?

The listing of Porsche shares on the Frankfurt Stock Exchange has returned the historic company to the forefront of the German automotive industry.

Meanwhile, the new generation of heirs and descendants of the founder of Porsche are getting closer and closer to winning the title of the most powerful family in the industry.

Porsche AG went public on September 29, raising total revenue of $9.1 billion for parent group Volkswagen AG at a valuation that reached $73 billion. Although it was a complex deal, the company with a presence in the industry for decades managed to convince investors and markets. It was the largest initial public offering in Europe in more than a decade.

The IPO gave the famous family a long-sought asset: a minority stake in Porsche's supervisory board, which allows the company to determine its own destiny without having to answer to VW's overlords.

The Porsche and Piëch families, through their investment company Porsche SE, already owned 53.3% of the voting rights and a total equity of 31.9% in VW. That means Porsche SE controls essentially all of VW, except for a 20 percent minority long held by the state of Lower Saxony, according to Bloomberg Intelligence. At the same time, Porsche still owns 12.5% ​​of the offered shares in Porsche AG and 25% plus 1 voting share of Porsche AG.

Internal conflicts

Fierce competition and intrigue, "stabbing in the back" and Nazi ideology, these are perhaps the right words to describe the history of Porsche-Piëch's legacy. It all started with Ferdinand Porsche, Adolf Hitler's engineer, who founded his eponymous company in Stuttgart, Germany in 1931.

Today, Wolfgang Porsche, the 79-year-old grandson of the founder and current leader of the renowned empire, is nearing the end of his influence as chairman of the supervisory board of Porsche SE and Porsche AG. There are many possible names for his successor. The decision, however, has not yet been made.

Intrigue and backstabbing, Porche billionaires will become the most powerful
Wolfgang Porsche (right) celebrating his father Ferry's (centre) 75th birthday at the Porsche villa in Stuttgart in 1984, with brothers Hans-Peter (left), Gerhard (second from left), and Ferdinand Alexander

Austrian by birth, company founder Ferdinand Porsche built military tanks for the Nazis, the V-1 Flying Bomb and the VW Beetle – the latter in response to a request from Hitler. Porsche founded the same consultancy with his son-in-law Anton Piëch and other financial backers. Rare cars, such as the controversial Type 64 designed to demonstrate Nazi power, resulted from early Porsche collaborations.

When Porsche died in 1951, his fortune was divided equally between his two children, Ferry Porsche and Louise Porsche, who were married to Anton Piëch. Therefore half of the Porsche family bears the name Piëch. Ferdinand and his son Ferry Porsche created cars and technology for years in collaboration with Volkswagen, which was founded in 1937 by the German Workers' Front of the Nazi Party. In 1993, Porsche family member Ferdinand Karl Piëch took over VW and remained as chairman until 2015.

Ferry, who was arrested for wartime activity on the side of the SS, ran the Porsche company while his father was in prison. In 1948, he and Anton Piëch met to lay the groundwork for the plans that would eventually become the "VW Act" of 1960, which gives Lower Saxony 20% of VW's common stock and is characterized as a blocking minority . The law, in theory, protects the company from a hostile takeover. The setup is still strong.

Ferry developed the first widely known Porsche, the 356, and became chairman of Porsche's board of directors. He was the honorary chairman of the board until his death in 1998. His sister was also involved in the management of the business, albeit to a lesser extent.

Family quarrel

After his death, Ferdinand Porsche gave his son Ferry and daughter Louise and their four children a 10% share of his estate. Since then, quarrels between families began. Louise sent her children to militaristic boarding schools, while Ferry sent his to schools that focused on creativity. The contrast in their philosophies is clear.

The climate became even worse in the late 1960s and early 70s, when the four main successors all worked at Porsche: Ferry's son, designer Ferdinand Alexander Porsche, his brother, head of production Hans-Peter Porsche , son of Louise, head of distribution Hans Michel Piëch and his brother, head of research and development, Ferdinand Karl Piëch.

The family decided from 1972 that no family member could work in the future at Porsche, which would only be run by outside managers. Butzi Porsche then founded Porsche Design as an outdoor business, which produced sunglasses, skis and watches, among other collections.

Ferdinand Karl Piëch, Butz's cousin, was also forced to enforce the family rule that no member work at Porsche. After being fired from his post at Porsche, he rose through the ranks at Audi in the 1970s and 1980s, developing cars such as the Audi 100 sedan and the Audi Quattro. In 1993, he became chairman and CEO of the VW Group.

Piëch resigned as chairman of VW in 2015. Before his death in 2019, Der Spiegel described the corporate culture Piëch had created at VW as "North Korea without the labor camps." Since then, things have changed in the family business, points out Michael Dean, auto analyst for Bloomberg Intelligence.

heir

As chairman of the family's business interests, Wolfgang Porsche is the de facto family representative for more than 80 descendants of founder Ferdinand Porsche over five generations. The hunter and painter has managed to take the powerful family to the top, as evidenced by the recent IPO. "The younger generation is low," Dean argues. "They see themselves as entrepreneurs more than anything else."


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