Piech stymies Porsche over Audi

[Dave]

from the wire - things @vw are continuing to heat up and porsche's attempt
to force audi to fit into their plans looks like it is now less certain....

it looks like piech hasn't forgotten the brand he rescued.

dave
'03 rs6
'04 allroad tdi
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Automotive News Europe
September 12, 2008 15:00 CET
UPDATED: 09/12/08 18:24 CET

HAMBURG, Germany (Reuters) -- Volkswagen Chairman Ferdinand Piech broke
ranks with Porsche, his own clan's sports car maker, by tacitly backing VW
staff in a boardroom showdown as thousands of workers protested outside.

A source briefed on Friday's events said Piech was not present during a VW
supervisory board vote, allowing 10 members from the carmaker's labor unions
to outvote the nine remaining shareholder representatives -- including three
Porsche executives -- in a motion concerning VW's premium unit Audi.

The defeat for Porsche Automobil Holding means Volkswagen's largest
shareholder will need approval from the VW supervisory board for any form of
cooperation with Audi.

Volkswagen's luxury brand is a potential competitor to Porsche because Audi
makes sporty cars such as the TT roadster and R8 high-performance coupe,
which rival Porsche's Boxster and 911.

Porsche Chairman and VW board member Wolfgang Porsche attacked his cousin in
a magazine interview, in a rare show of divisions between the Porsche and
Piech clans.

"I am horrified by the behavior of the chairman," he was quoted as saying of
Piech in Germany's Focus magazine. A preview of the article was released
ahead of publication on Monday.

Extra power

The squabble took place as VW staff staged one of the biggest protests in
the carmaker's history to support a German law giving labor and the state a
big say at VW, which has passed Ford Motor Co to become the global number
three automaker.

Both the European Commission and Porsche, poised to boost its VW stake to a
majority, oppose the so-called VW law, which gives the state of Lower Saxony
extra power to shape company strategy with its shareholding of just over 20
percent.

Union IG Metall said 40,000 Volkswagen workers from inside and outside
Germany protested near its Wolfsburg headquarters. Staff from MAN, a truck
maker in which VW holds a large stake, joined them.

"In times of shareholder value and finance market-driven capitalism we need
more, not fewer, VW laws in our country," IG

Metall's leader Berthold Huber shouted in a passionate address to the noisy
demonstration.

After the EU's highest court ruled last October that the 48-year-old law
violated EU rules on the free flow of capital and needed changing, the
German government made changes aimed at satisfying concerns in Brussels.

But EU Internal Market Commissioner Charlie McCreevy rejected those changes
as insufficient.

Huber told the Westdeutsche Allgemeine Zeitung daily he would shift the
protests to Brussels if the Commission lodged another complaint against the
VW law, as McCreevy's office has threatened.

Earlier this week, Lower Saxony's premier said the state would raise its
stake in Europe's biggest carmaker to 25 percent to retain its blocking
minority if necessary.