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The ambitious expansion plans of Porsche to become a dominant player in the German market were in tatters today, leaving the fast carmaker set to fall prey to Volkswagen, the company it had aimed to buy.
The grandiose dream of chief executive Wendelin Wiedeking to take Porsche to the top table of European carmakers was finally ended as he was forced to quit the company he has led for the last 16 years.
His finance chief Holger Haerter is following him out of the door as speculation grows that the much larger VW will within hours turn from prey to predator and launch a takeover to end the much-vaunted independence of Porsche.
The carmaker, which is based in Stuttgart, confirmed that Wiedeking is to get a staggering pay-off of €50 million (£43 million) while Haerter's redundancy terms are worth €12.5 million.
Wiedeking has been lauded as the man who turned round Porsche in the 1990s. But he then nearly bankrupted the company as he engaged in a power struggle with his VW arch-rival Ferdinand Piëch.
Porsche took a controlling stake in VW, but at a cost as it hit a wall of debt which rose at one stage to as much as €10 billion.
The Porsche board was meeting through the night. As well as showing the door to Wiedeking and other executives, the remaining directors have started preparations to try to raise money.
Those plans include the beginning of talks for the potential sale of a stake in Porsche to the Gulf state of Qatar and the go-ahead to raise €5 billion in a capital raising, as the Porsche-owning families signal that they are prepared to cede control.
The unanimous approval of the steps by the company's supervisory board, which was still meeting in the early hours of this morning signals that Porsche's owning families — the Porsche and Piech clans — are open to surrendering their influence at the sports car maker.
The Porsche and Piech families control 100% of Porsche's voting shares and have resisted selling a stake to an outsider in the past. Porsche amassed its debts as it tried to buy a 75% stake in VW, a move which backfired when credit markets turned sour.
Porsche still owns a 51% stake in VW, and many now expect Porsche's management board led by Wolfgang Porsche to open talks with VW.
Stefan Bratzel at Germany's Automotive Research Institute said: “Wiedeking's course has split the families and caused major irritations in Porsche's working ties with VW. Wiedeking has no place in a combined VW-Porsche carmaker.”
But other German analysts fear for the future of the iconic Porsche brand if its parent company become subsumed into a larger entity.
