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VW’s Chief Executive Scores Victory Over Chairman

In a vicious boardroom battle that is most un-German, Volkswagen’s CEO, Martin Winterkorn, seems to have defeated the revered and long-serving chairman, Ferdinand Piech.

Winterkorn appears to have received the backing of the company’s directors after a long corporate battle that has had the motor industry enthralled. Winterkorn has won a ringing endorsement of his position as CEO from the VW steering committee, which issued a statement saying that he was the ‘best possible’ CEO of VW. This means that the VW boss’s contract will be extended in 2016 in what is being seen as a rare and damaging defeat for VW's chairman, Ferdinand Piech. Piech is seen as a patriarch of the company, and as a member of the founding family he has been regarded as almost untouchable. 
Piech had recently told motoring journalists that he felt distanced from his CEO - a statement that most thought would signal the end of Winterkorn’s tenure as CEO at VW. Piech himself is due to step down in 2017, and it was thought that he was attempting to start a leadership battle before his retirement. It seems, however, that he has failed rather spectacularly to gain the backing of his fellow directors in this regard. It now remains to be seen whether the two men can work together until Piech retires in a couple of years. It is a vital time for VW, which is battling falling sales in key markets and undergoing significant structural change. The two bosses will therefore have to be seen to be working effectively together, especially when they appear together on the podium at the company’s upcoming shareholder meeting in Hanover.
Piech has for many years been a formidable figure in the VW hierarchy. He is the grandson of Ferdinand Porsche, who designed the VW Beetle. In the past, just a single comment from Piech has been sufficient to end the career of any VW executive, so many thought that his comments about Winterkorn would spell the end for the CEO. These comments resulted in a crisis meeting in Salzburg, and senior VW executives and shareholders flew in on private jets to attend. Piech, however, failed to gain the backing of enough of these shareholders to oust Winterkorn. Instead, the shareholders moved away from Piech to back Winterkorn. The move also seems to have caused a family feud with Wolfgang Porsche, Piech’s cousin, whose firm, Porsche SE, has just over 50% of VW shares. Porsche is quoted as saying that Piech’s comments were his own opinion and did not represent the voice of the family. 
Piech is regarded as being a skilled motor engineer and also a deft corporate operator, but in this instance he has found himself isolated. Winterkorn is highly regarded and has been credited with the near doubling of VW sales to 200 billion euros under his leadership. This means that the company could soon overtake Toyota as the world’s biggest car firm. Those who are not so impressed with Winterkorn’s leadership say that these results are largely due to the success of Audi and Porsche and the company’s expansion in China. This, they say, covers up deeper problems at VW, such as relatively low productivity and unpopular models in the key US market. VW is also seen to be lagging behind the market when to comes to electric cars and autonomous driving technologies. 
It was Piech himself who brought Winterkorn into the very top echelons of VW management, and the two men seemed to work well together as they strived to reach their dream of making VW the biggest car manufacturer in the world. But it is this very ambition that observers say has caused the rift between two men who were once so close that it was said that they didn’t need to speak to know what the other was thinking. The battle to be the world’s biggest has caused VW to buy up more brands, and some say that the company is now close to being impossible to manage. It seems that the two men are now blaming each other for these problems.

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