VW's Bernhard to Resign; Porsche May Buy Control of Automaker

Washington DC November 16, 2006; The AIADA newsletter reported that Wolfgang Bernhard, the famous cost cutter who served as Chrysler group's COO from 2001-2004 and current head of the Volkswagen brand, is expected to resign from VW today amid a sea of company changes, which included the ousting of VW Chief Bernd Pischetsrieder by the supervisory board last week, reports BusinessWeek Online.

Since recruited by Pischetsrieder in 2005, Bernhard has been a driving force in trying to lower VW's purchasing costs, beefing up its product plan, and improving quality. Volkswagen declined to comment on German press reports about Bernhard's exit.

Following the announcement of Pischetsrieder's departure, Martin Winterkorn, previously the head of VW's Audi luxury brand, was appointed CEO. VV Chairman Ferdinand Piech, whose grandfather was automotive legend Ferdinand Porsche, has been calling shots en route to gain control over the automaker, according to media reports.

The Piech-Porsche family holds all the voting stock of Porsche and is VW's largest shareholder. Porsche announced Wednesday it had raised its stake to 27.4 percent and aimed to raise its holding as high as 29.9 percent with a plan to create authorized capital worth around $10.2 billion as a possible acquisition currency.

A 29.9 percent stake in VW, according to a European Commission ruling expected next spring, would give Porsche a hefty amount of control over VW strategy, operations, and personnel. BusinessWeek reports on rumors that VW may even sell or transfer its luxury Audi division to Porsche to create better efficiencies and synergies between the two luxury brands.