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Wiedeking can get away with this because he has the backing of the Porsche family, which still holds a controlling interest.

The move on VW becomes a lot more interesting when one considers that VW supervisory board chairman Ferdinand Piech is also the "head" of the Porsche clan - his uncle founded the company, and his grandfather designed the original prewar beetle.

I agree that a lot of what Wedeking says is sound, but the whole thing is just so cozy it's creepy.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue May 15th, 2007 at 04:53:18 AM EST
because he has delivered massive profits, and thus market players, even if they are unhappy not to be given the information and "behavior" they expect, are motivated enough by these profits to buy thr shares.

He has the 'luxury' of strong results (possibly made possible by the longer view taken by the family shareholders) to brush off the usual requests for short term performance standards (including cutting costs and the like).

But the point is that he has proved that some of these 'costs' (i.e. in his workers) are actually smart investments. Of course, that lesson will not be remember in any systematic way by investors.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue May 15th, 2007 at 05:03:48 AM EST
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I entirely agree that by the standards of our day Wiedeking is an extremely farsighted and insightful manager who understands the importance of long-term thinking. Certainly other corps would do well to follow his example.

I was merely noting that given the Porsche ownership structure, he can tell the market playas to go pee up a rope as long as he has the family behind him. (Wikipedia notes that "As of 2005, the extended Porsche and Piech families controlled all of Porsche AG's voting shares.".)


The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue May 15th, 2007 at 05:20:34 AM EST
[ Parent ]
Well. lets take one step back and look at the big picture. The current economic climate is very favorable to luxury items. Sales of luxury cars, Porsche included, have broken consecutive records during the last few years (using Portugal figures, here).

So i have the feeling that some of his success comes from other CEO's not acting like he does.

by Torres on Tue May 15th, 2007 at 06:13:24 AM EST
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Meanwhile, the backdrop to this development is that Porsche the company buys into VW, to 'protect' VW from takeover after the EU crushed the 'VW law' (a law expressedly designed to prevent hostile takeover and majority control by any actionary).

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue May 15th, 2007 at 05:07:56 AM EST
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Wiedeking can get away with this because he has the backing of the Porsche family, which still holds a controlling interest.

Yes, if it was down to institutional shareholders, he'd be out of a job. Gotta watch the bottom line (and race towards the bottom).

It reminds me of CostCo in America. It's like an ehtical version of Wal-Mart and is very succesful, not just because of the relatively low prices but because a lot of its customers appreciate that plentiful well-treated staff provide a better shopping experience.

Yet two years ago they were threatened by institutional shareholders who felt that labour costs were too high compared with Wal-Mart and demanded a more aggressive policy in terms of wages and training. I think they got away from the threat, but I'm not sure how.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Tue May 15th, 2007 at 07:07:05 AM EST
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