VW chairman Piech resigns after power struggle with CEO Winterkorn

Volkswagen CEO Martin Winterkorn, Prof. Dr. Ferdinand K. Piëch and Ursula M. Piëch during more harmonious times.

Volkswagen AG chairman Dr. Ferdinand Piech resigned from his position as well as from the company’s supervisory board after failing to remove CEO Martin Winterkorn. Piech challenged the authority of Winterkorn, previously a close confidant for decades, two weeks prior to his resignation. A report by Bloomberg says the attack came without explanation. Piech’s wife Ursula, a former kindergarten teacher, also resigned from the board.

Piech, grandson of Beetle creater Ferdinand Porsche, headed daring projects such as the Porsche 917 race car. While at Audi, he was instrumental in developing the brand’s quattro four-wheel drive technology. Audi is now the world’s number two premium car brand. Under Piech’s term as CEO, VW’s market value grew 15 times to 110 billion Euros, according to Bloomberg. Toyota meanwhile grew 5 times, and GM went into bankruptcy.

After Piech challenged Winterkorn, the VW supervisory board threw its support behind Winterkorn.

The VW group is comprised of ten brands, from Skoda to Bugatti, many of which compete for the same market. Even as they share platforms and technology, the brands have their own independent engineering and marketing groups. This engineering-driven approach is seen as one of the pillars of the VW’s group’s success but also a potential weakness. Piech, with his engineering and family pedigree, is seen as the ‘glue’ which holds the Volkswagen group’s various brands together. Piech’s departure leaves behind many questions about the future direction of VW, although Volkswagen stock initially rose following his resignation.