Driving the GT4 Wales - # 39; Life here Speed # 39; Synergy with Esso Part 1
When you play the game of thrones, you win or you die There is no middle ground.
Luxury car manufacturer generated May 13 BN in profit before tax, and sold a record 98.652 cars - an astounding 136K profit per car sold even for a luxury brand, the number seemed almost impossible.
Once again near 11 $ 5 billion of that profit was not selling cars - he was speculating on financial derivatives Porsche amassed slyly an important position in call options to buy Volkswagen shares as a BBC report was set Porsche a hedge fund with a carmaker joined in 2008, the automotive sector was good, but the activity of financial engineering was even better.
CEO at the company, Wendelin Wiedeking, was the highest paid executive in all of Germany, he took to the head of the company in 1993, when the automaker once fabled bleeding money and the brink of irrelevance When he took the position, he negotiated a provision apparently pointless in his contract that would give him one as a bonus annual profits of the company - in the unlikely event that the company has already turned a benefit society lost 150MM a year at the time; no one could predict how this provision ve turn be lucrative.
The company improved operational performance considerably under the direction decade of Wiedeking, and the company has sold thousands of cars margins very lucrative and therefore, the general manager set his sights on a financial cut even more, he d acquire Volkswagen, the largest car manufacturer in Germany at the time, Volkswagen produced 50 times more cars than Porsche But from 2005, the smallest quietly bought competitor Volkswagen and options shares; in October 2008, Porsche announced it controlled 74 VW.
At this time, the hostile takeover of Volkswagen massive pretty Porsche seemed inevitable, but only five months later, the collapsed Porsche plan just before completing the acquisition, the global financial crisis worsened and the company lacked silver Porsche went severely into debt to buy VW; Suddenly, banks were eager to get their $ 13 billion in outstanding loans.
Porsche was left scrambling for a white knight to save its financial difficulties In a surprising turn of events, this white knight was eventually Volkswagen, the company very Porsche tried to acquire.
Porsche, like most German automakers, saw its fortunes rise and fall dramatically.
Founded in 1931 by Ferdinand Porsche, the company was first an auto design firm that helped design cars automakers Specifically, the company designed the Beetle, nicknamed Adolf Hitler as the car people, in the name its largest customer - Volkswagen.
Ferdinand Porsche the highest individual picture with Volkswagen in 1939. Porsche designed.
It wasn t until 1948, when the son of Ferdinand Ferry Porsche could not find a sports car to his liking, Porsche started making its own cars first model of the company, the Porsche 356 was a success, it went on to sell 76,000 units, Porsche put on the automotive map in 1963, the company launched its signature model, the Porsche 911; Today, the car is still the cornerstone of its range.
Since Porsche has produced its original model, the reputation of the company car teetered between luxury and precision engineering overpriced junk that often breaks down in 1993, he was firmly in the category later, and time dark came down on the company.
Having sold in 1993 50.000 vehicles per year in 1980, sales dropped to 14,000 company cars In the US, the biggest market for Porsche, the company was obliterated The rising value of the deutschmark, popularity growing Japanese cars, and the US recession tanked sales of 3000 cars sold per year, down from 30,000 a few years ago the company was in financial ruin.
It was when, aged 39, Wendelin Wiedeking took over as CEO of Porsche A former engineering director of the company, Wiedeking sought to revitalize the German automaker by adopting a new kind of Japanese techniques that he hosted on a new set of principles make cars with fewer defects, manage inventory less and hire fewer production workers.
To implement such radical changes in the Porsche factory, he sought help from Shin-Gijutsu, a Japanese consulting firm comprised of former Toyota manufacturing experts Yoshiki Iwata, the lead consultant, remembers Porsche s conditions less than ideal.
It was appalling Where is the car factory, I asked Looks like the warehouse of a moving company and there were no workers, just climbing up and down shelves monkeys.
A complete overhaul production methods followed at the request of the consultant, Wiedeking symbolically sawed storage shelves of half plant; Now there were 50 less shelfspace keep all this useless inventory around.
Although some employees were unhappy to be ordered around by consultants didn t speak a lick German, Porsche factories have improved considerably in Wiedeking assembly time per vehicle has increased from 120 hours to 72 hours per vehicle defects 50 narrowed, the work required to make cars decreased by 19 and 30 has been used less factory space.
Perhaps most striking, Porsche has made its point of view artisan crafts for a more scientific one - something Daniel Jones, a professor at Cardiff Business School, listed in a 1996 article in the New York Times.
Traditional crafts including Germany became famous and was the repository of the mounting pieces so they fit perfectly but that was a waste of time the parties should have been done right the first time.
Thus, the new knowledge is the know-how to think of smart ways to make things simpler and easier to assemble is the art of creating an uninterrupted flow of manufacturing.
When the United States and the global economy rebounded in 1996, Porsche is a company more productive and efficient ready to take advantage of sales demand increased Spiked, particularly in the United States by the end of 1996 the company broke even, and in 1998, turned a profit of 166 million.
Wiedeking, who had traded in his contract that he would receive 1 profit before tax bonus, received a substantial salary but his pot of gold was about to get much During Wiedeking era, the company introduced a little more affordable sports car the Boxster, and Cayenne sport utility vehicle, the latter during a time when Americans gaga SUV These introductions effectively tripled the turnover of the company.
In 2005 did a company's sales jumped 10 3 billion per year, as against 1 7 billion in 1993, the company jumped 1 9 billion profit, entitling Wiedeking at a premium of approximately 20 million in 2006, each employee received a 4655 bonus.
At that time, Wiedeking began struggling with what to do according to his philosophy, the company needed to actively work on something new, otherwise atrophy rest on it laurels He remembers his process.
I just started talking about visions for 2005 and 2010 where the company will be in 2005 and 2010. In 2002, we present the SUV What will we do then this is, again, my work, because a business must If growing a company is not able to grow, it can not survive if you stagnate, I think art the beginning of the end.
In the early 21st century, Porsche had emerged from a crisis stronger than ever operations were modernized, new products were selling strongly, and profits have reached a record level As recalled then CFO Holger H rter, Porsche had launched these products and invested in operations without using debt.
We learned the hard way that the banks are there for you when you do not need, and when you need them, they're nowhere to be seen.
Yet the same Wiedeking and CFO forget this lesson only a few years later the company would borrow billions he sought, it is the next conquest of Volkswagen's acquisition and as CFO H observation rter to suggest when needed Porsche the most banks, they would be nowhere.
In 2005, Volkswagen had the double privilege of having a course of depression and be an important partner for Porsche Although the company had $ 123 billion in annual sales, annual profits were only about 2 2BN s market capitalization and only 17 billion it was widely regarded by the financial community to be a pretty crappy business, which is why it was trading at a low multiple of turnover.
Since Volkswagen traded relatively cheap for a company with 120 billion turnover, there were rumors that US raider Kirk Kerkorian would like a game to acquire - or worse, an American auto company or Japan could swallow There were, after all, a lot of companies out there that would pay 17 billion.
Although Porsche had always had a close relationship with Volkswagen, Porsche over the years had become increasingly dependent on its counterpart more particular, the Porsche Cayenne SUV, responsible for nearly a 1 3 by 2005 sales of the company was built using the chassis SUV VW - a move that saved hundreds of Porsche million 4-door Porsche will soon be published sedan, the Panamera, is also built on a VW chassis These new Porsches were essentially Volkswagens fancy with a Porsche engine dropped in.
With this context in mind, September 25, 2005, Porsche announced that it paid on April 2 billion to acquire a 20 Volkswagen Although it was a significant part of 6 0000000000 cash reserve of Porsche, the transaction would be very difficult for a corporate raider or car company competing to swoop up Volkswagen, Porsche and compromise thusly the ability to build cars on Volkswagen platforms in its initial announcement, Porsche CEO Wiedeking clear that this minority position was taken just to ward off potential hostile takeovers Porsche, he stated categorically, would not try to take over the business.
Our planned investment is the strategic answer to this risk, we hope to ensure the independence of the Volkswagen Group.
Financial markets have been confused by the acquisition of Volkswagen shares Porsche Why a sports car company so much money pours into a mass market car company in difficulty, it seemed to be the equivalent of a company like Hermes announcing that it has taken a significant interest in Old Navy.
Porsche has said that they would reinvest in the company rather than pay higher dividends, wrote a German Financial Analyst Dresdner Kleinwort Wasserstein Now they are investing in one of the least profitable businesses cars in Europe.
The Economist weighed on the movement of CEO Wiedeking - somewhat prophetically, he is.
M. Wiedeking is one of those rare beasts in the jungle of companies that have not yet had their come-uppance It is widely revered for his candor and his leadership of Porsche, since the dark days of near bankruptcy in 1993 when he took to years of growth and incandescent results today it would be a shame that David himself was a victim and went too far instead of another phenomenon, known as the promotion of Peter principle beyond a level of competence.
It is another thing also In 2005, it was technically impossible for Volkswagen to get acquired by a person due to the so-called Volkswagen rule The essence of this rule was that the German local government of Lower Saxony had 20 Volkswagen and could prevent anyone from acquiring company without their permission, or anyone to have more votes than questions about the shareholders.
However, this law was incompatible with the laws of the European Union that barred capital restrictions like this, and there was reason to believe that he would soon be repealed when this happened, Volkswagen would be fair game for a acquisition of its 20 stake in the company, Porsche made it less likely that someone else would be able to buy Volkswagen in case of repeal.
A year later, in August 2006, Porsche slightly increased its stake in Volkswagen from 20 to 25 Furthermore, the company began to lobby actively for Germany to repeal the Volkswagen rule so that Porsche could fully enjoy their rights as a shareholder to the public, said Porsche still not be interested in an acquisition.
In November 2006, Porsche has increased its stake in Volkswagen to 29 September A Businessweek trumpeted as King Porsche is looking to expand the Empire or of course, referring to Wiedeking As reported by the New York Times Wiedeking began discussing Volkswagen as s' he was already his boss.
We could be members of the board or passive active members of the board, he said at a meeting that was supposed to be on its business performance is our intention to be very, very active members Supervisory Board.
We believe that if anyone can resist Toyota, it is Volkswagen There will be changes - there must be changes, no doubt.
Buying a stake protected access to factories Porsche VW also Wiedeking big smile, the share price was cheap.
At present, another reason for Porsche to buy Volkswagen shares Porsche REVEALED thought the company was cheap, and it was a good deal in the world of interviews this time, Wiedeking referred Volkswagen as a gold mine with lots of opportunities to make the sort of operational improvements that have proven Porsche around previous years.
Turning around Volkswagen was to be the next big project for Wiedeking and Porsche.
As Porsche has continued to declare publicly - and vehemently - that he had no intention of resuming the largest Volkswagen, actions otherwise In March 2007, Porsche announced it would increase its share in Volkswagen to 31 at present, Volkswagen shares were trading at a price two times from when Porsche began to acquire the two years before he was getting expensive to buy Volkswagen.
A year later, in March 2008, Porsche's supervisory board has authorized the company to increase the share of the company in Volkswagen to 50 By this point, Volkswagen shares had tripled in three years prices before, when Porsche began buying them.
Volkswagen became the most valuable company in the world.
As Porsche slowly bought up Volkswagen shares, financial markets reacted in two ways First, the price of Volkswagen shares continued its upward trend - despite the poor performance of the company This decision was based on the belief that Porsche continue to buy shares and drive demand for the stock upward.
Second, there were many who thought that the course of the Volkswagen share was a case of the emperor has no clothes and the Volkswagen share price would soon fall the price was artificially high based solely on the expectation that Porsche would keep buying shares in Volkswagen - not because of anything fundamental about Volkswagen Since Volkswagen rule was still in effect and that Porsche has publicly stated that he was not interested in t merge with Volkswagen, many analysts were betting that Porsche soon stop the acquisition of Volkswagen shares and their value would fall.
In the true sense, Volkswagen acquired Porsche shares are only valuable on paper, if Porsche tried to sell any of these shares, the value of its holding Volkswagen probably would drop because the market expectation that Porsche would continue to buy Volkswagen would at the same time, buying more shares in Volkswagen continue to be expensive because it would mean Porsche continued to support prices.
In 2008, the effects of the financial crisis hit public procurement and pretend it was less likely that Porsche could borrow enough money to buy Volkswagen shares fall, Lehman Brothers, Bear Stearns and Washington Mutual collapsed Almost every US bank received US government funds injection to avoid insolvency After years of lax lending practices, banks stopped lending money.
As a result, Volkswagen has become one of the most shorted shares on the market in October 2008, nearly 12 8 shares were short-circuit with the hope that the price would fall and would Shorters profit.
On October 20, the financial publication Barron's published an article titled VW Most overvalued stock of the world and assumed that Volkswagen shares would fall like a Beetle probably pushed off a cliff once Porsche stopped buying shares in the company.
The timing of this article have been worse pus.
On October 27, 2008, Porsche has dropped a bomb on the financial community, he again increased its stake in Volkswagen - now 42 6 Moreover, he had secretly bought cash settled options to buy another share May 31 outstanding combined Volkswagen, Porsche now had 74 corned 1 of all Volkswagen shares also after years of denying its intention to acquire Volkswagen, he finally said it intended to pursue a domination agreement - or 75 shares doing the 12 billion sitting on the balance sheet of Volkswagen by Porsche could be used to finance the acquisition.
For sellers, it was a disaster not only Porsche continues to buy Volkswagen, which led its price, but since Porsche and the government of Lower Saxony ordered in 94 one Volkswagen share together, there was virtually nothing available actions the market for short sellers to cover their positions.
The price of the Volkswagen share has climbed to 200 to 500 per share per share in a day the following day, the shares soared to nearly 1,000 per share for a brief moment that day, Volkswagen was technically the company most valuable in the world.
Volkswagen share price in the first 10 months of 2008.
Short sellers have lost tens of billions of dollars over these two days on the third day, Porsche agreed to five of its shares on the market to provide liquidity for buyers and probably a massive profit on the shares then only that the Volkswagen back shares over land levels.
This maneuver to secretly buy shares would have been and would still illegal in the US In Germany, however, where Porsche is based, it was probably normally legal, it should have revealed his position more and more, but it used settled options in cash, which technically had not been considered buying shares in the company which means that the underlying asset of the derivative was even money at the expense of Volkswagen share - not an actual hand also, he these options purchased in small quantities spread between six different banks it was so complicated that no one person knew the extent of the movement of Porsche.
Porsche was close to completing one of the most daring acquisitions ever, it had taken control of 74 1 percent of the shares of one of the largest companies in the world also when he reached 75, he would try access to Volkswagen's cash reserves and if the Volkswagen rule was repealed as expected, Porsche could easily be able to own Volkswagen outright.
But none of this happened at the place in the coming months, Porsche plans fell apart.
Rumor Ferdinand Pi ch likes to run the chickens of the road in his Volkswagen Touareg Whether true or not, it certainly tends to trample human feet, at least metaphorically.
- The Economist on Ferdinand Pi ch, president of Volkswagen.
If there is a type of character Poutine Vladimir in the automotive industry, the president of Volkswagen Ferdinand Pi ch is a good candidate known for shooting mercilessly Volkswagen executives and CEOs, and buy car companies luxury sports on a whim, Pi ch Volkswagen was being run as his own personal kingdom After decades at the company, he had turned manufacturer second level unreliable German cars in a stable automotive franchises with more central a hundred billion dollars in sales annually Piech autocratic regime made Volkswagen a force to be reckoned with.
But to the surprise of everyone, Ferdinand Pi ch seemed to give up Volkswagen without much of a fight in early 2006, Piech announced he would resign from Volkswagen's board when his term ended in 2007 to make way for Porsche CEO Wiedeking and CFO H rter.
Although not typical, it appeared to all that maybe he had recognized her time running Volkswagen coming to an end.
But Pi ch will eventually resign, he will remain behind the place behind the scenes and manipulate the process to Volkswagen would eventually buy Porsche at the 11th hour - after almost all analysts had speculated that Porsche acquired Volkswagen In the end, Pi ch get work he always fought for, but which had eluded him for years to get it to run Porsche.
Despite its name, Ferdinand Pi ch is actually the grand-son of the founder of Porsche, Ferdinand Porsche Under this line, it was the second largest shareholder in Porsche.
During this episode, Pi ch sits on the boards of Porsche and Volkswagen During the execution of Volkswagen, Porsche its assets became very precious; Porsche bought Volkswagen shares, he made billions of dollars.
To say this was a conflict of interest would be an understatement.
Ferdinand Porsche, the founder of the eponymously named company, had two children a boy and a girl The girl married a boy with the name Pi ch, where half of the company's heirs have the name Pi ch, and half longer retain the name Porsche fortuitously.
Ferdinand Pi ch, the grand-son of the founder, was born with a 10 Porsche - the same as the rest of the grandchildren He entered the family business in 1963, and in 1971 became director of engineering as such, he was the leading candidate to succeed his uncle as CEO of Porsche.
Ferdinand Pi ch left with this Ferry uncle, General Director of the Porsche image via.
However, family quarrels prevent that happening.
As sometimes happens with family businesses, things were a bit of a disarray by the third generation In the case of Porsche, the acrimony had become so bad that in 1970, the family decided that no member of ch Porsche-Pi clan would be allowed to play an active role in the company's management in place, the family would continue to run the board and keep 100 shares with voting rights of the company.
For family members Porsche relax with their trust funds, leaving the management of the family business was very good - but it meant that Ferdinand Pi ch, the heir apparent to lead the company, had to find a new job in 1975, he joined Audi, a small car brand owned by Volkswagen, as Head of technical development.
Ferdinand Pi ch was also the instigator of much of the family drama in 1972, as a married man with five children, Pi ch struck up an extramarital affair with Marlene Porsche - the wife of his cousin and fellow heir, Gerd Porsche Pi ch has left his wife Marlene, and they lived together for twelve years and had two children together during that time, Pi ch also had two children with other women.
You can imagine that taking your wife's cousin could make things awkward at Porsche-Pi ch family gatherings and meetings of the Management Board of the company Many family members suspect Pi ch has done this only to win access to company shares Marlene received in the divorce, although that fear has never taken place in 1984, Pi ch Marlene left for their nanny 27 years, Ursula They are still married today.
At Audi, Pi ch has been credited with integrating the Quattro all wheel drive system in cars, and turning the company in the sports luxury brand, it is now the mid-1980s, reports surfaced that cars accelerated erratically and cause serious injury; Audi had to institute a massive vehicle recall in the US When Pi ch replied brusquely - We must learn how to drive the Americans - the company's car sales fell 50 in a few years.
In 1988, Pi ch became the CEO of Audi In 1993, he was President and CEO of the parent company, Volkswagen When the company was losing more than a billion dollars a year and would have been just three months the Pi ch bankrupt the company of the dead, it reduces costs by reducing the number of platforms to 12-4 used vehicles, brought ace reduce General Motors Jose Ignacio Lopez costs, and quickly taught himself policy to deal with the unions and the German government instead of laying workers, he negotiated a 20 reduction in working hours and lower wages.
It starts also increased considerably on the enterprise market in the US and Europe with the introduction of new cars like the Beetle and the VW Passat In 1998 he transformed Audi ad in a legitimate competitor to Mercedes and BMW However, as recounted in a BusinessWeek article, this turnaround has come at a cost.
visionary leadership Pi ch has a dark side VW achievements since 1993 came to a virtual autocracy.
Moreover, its iron grip on VW means that there are few checks and balances on its decisions Pi ch decreased the VW board with only five members, nine before he takes the highest He holds post personal responsibility for R & D, production, purchase, and brand VW - areas generally attributed to directors.
With his staff, Pi ch could not stand dissent During his time at Volkswagen, he shot more than 30 members of the board and the CEO of Volkswagen and Audi At the end of the 1994 tail, one year after Pi ch has been appointed CEO, Volkswagen group managers presented their ideas at the time chairman of the board of this company is led by a man with psychopathic traits in a meeting, a manager has the mistake of challenging a Pi ch policy; icy response Pi ch I'll remember your name.
But under the command Pi ch s, Volkswagen prospered so much so that they could afford to buy a lot of sports car manufacturers in rapid succession, the company acquired Bugatti, Lamborghini, Bentley, not the assets of the same Rolls Royce brand, in addition to brands such as SEAT, Skoda and Ducati at that time, Volkswagen has become a world power equal to car with Toyota and General Motors.
In 2002, Pi ch has reached the age of mandatory retirement CEO 65; when he resigned as CEO, he remained president and retained the union leaders of dictatorial power, German politicians who oversaw the government in the business participation and executives were all hand-picked as Pi ch-loyalists.
All this is to say that it is surprising that Pi ch sat idly as the Volkswagen empire he had built with an iron fist was devoured by an upstart who led Porsche - family business that Piech was deprived of the care.
Throughout the process Wiedeking and Porsche slowly acquire their stake in Volkswagen, Pi ch was publicly silent on the issue not only that, but he sat on the boards of both companies, so he was very aware of what Porsche done since he was one of the largest shareholders of Porsche, observers noted that he can sell on Volkswagen to Porsche for it to take advantage of the movement.
In 2006, with two years left on his term as CEO, Pi ch has announced that he will resign from the Volkswagen Board of Directors when his time expired Apparently he had capitulated to Wiedeking and Porsche But this two years came and went, Pi ch soon reversed its decision.
Apparently Pi ch was just biding his time.
At the end of 2008, Porsche had acquired 42 6 of Volkswagen and has the option to acquire more May 31 However, in this process, the company also acquired 13 billion in debt to finance the acquisition.
Volkswagen stock had appreciated significantly, and that the company had made paper fortune on these financial transactions; Meanwhile, shorting Volkswagen stock speculators had lost tens of billions of real dollars Moreover, once it has acquired 75 Volkswagen 12 billion company's cash reserves become available in Porsche - in assuming the Volkswagen rule would be lifted soon.
Wiedeking, the CEO and H rter, CFO, have been hailed as financial geniuses Arndt Ellinghorst, an analyst at Credit Suisse, Porsche called one of the most sophisticated investors in the world, as well as being a car manufacturer the Economist noted with humor.
Big bend and stupendous acceleration are popular Porsche cars among thrill-seeking bankers and hedge fund managers Now customers are discovering that the automaker itself an unexpected talent for markets around corners, because they reported that Porsche made between 7-15BN of the short squeeze.
But in reality, the company was done in a very difficult situation Their main asset was the shares they held in society Volkswagen These actions are only valuable because of market expectations that Porsche would continue to buy Volkswagen shares ; and if they did, it would be very expensive to buy the rest of society If Porsche has stopped buying Volkswagen shares, Volkswagen share price would drop, the value of most assets of Porsche and fall the massive losses experienced company.
This scenario would be very bad for Porsche with creditors - and now there were lots By spring 2009, Porsche had accumulated 13 BN in debt this wasn t an enormous amount of debt as they were 2BN operating income per year of Porsches sales and had more than half of Volkswagen, but to buy withdraw the rest of Volkswagen, they must have access to a lot more capital.
And precisely when Porsche banks needed most, banks stopped lending money The words of the years of CFO of the company before - the banks are there for you when you do not need and when you need of them, they're nowhere to be seen - now seemed prophetic.
At the end of 2008, the great financial crisis hit and all banks have to be given new Porsche or funds allowed the company to refinance the debt when it came due; in any case, they are no longer interested in financing a speculative system to corner the Volkswagen share market.
Porsche debts matured much earlier than expected and not only - after years of steady growth in car sales, the main business of Porsche car sales was seriously injured by sales of the recession and the unit fell 27 in a year.
A financial maneuver that was considered brilliant few months earlier was now a bad decision Porsche was the money March 24, 2009 the loan payments of $ 13 billion were due Whereas previously it would have been an easy task to refinance the amount , this time the banks weren t interested also Porsche owed money to 15 different banks, each of which could bankrupt the company if it wished.
CFO Porsche has managed to avoid disaster the day before the loan was due and refinance most - but not all - of the debt of 13 billion in new loans Fishing April 4 BN would be due within 6 month.
But even with most of the refinanced debt, Porsche would need additional capital to pay part of the loan that was currently due, it turns out that one of the members of the Board was able to get the company of an emergency infusion of nearly a billion dollars of another company he also served on the board of the loan would be Volkswagen, orchestrated by its Chairman Ferdinand Pi ch.
In an instant, Porsche has gone from prey to predator Once the edge of the acquisition of Volkswagen, Porsche is now borrow itself a billion of them just five months later.
Porsche didn t publicly disclose the loan Volkswagen for two months, but inside they knew that their quest to buy Volkswagen has more than one does not simply acquire the company you borrow money from.
CEO Wiedeking and perspective CFO H rter, it was a failure - but not necessarily a Porsche say circumstance was still a big car company and they had acquired Volkswagen half with options to acquire more celui- these they might not be able to finalize the acquisition, they found, but they still had a valuable business - as long as they didn t strapped Surely the money would be available.
however, was that they were, immediate problem now about to run out of money they now owed money to a myriad of banks and Volkswagen, the company that they had been antagonizing But the threat 4 debt payment 4 Bn a sword hanging over the head of the company, in addition to paying annual interest estimated 790 MM.
Porsche needed help At best, it could retain its independence if it has a new investor or on the contrary, it could merge with Volkswagen as an equal even worse from the perspective of the management of Porsche, it could be acquired by a another car company the worst case scenario, however, was very likely to search - the sports car manufacturer sanctified would simply run out of money and go bankrupt.
As many governments have made during that time, the German government has set up a stabilization fund to lend money to German companies that needed a rescue Porsche applied for the loan of several billion dollars, but he was rejected he could not have helped that the head of the government of Lower Saxony and Volkswagen board member Christian Wulff, was a close ally of Angela Merkel, German Chancellor Wulff, who later became the President of Germany under Merkel, said to be the one who convinced her not to repeal the Volkswagen rule.
In late spring, it appeared that a savior had emerged for Porsche, as Qatar from Qatar sovereign fund was close to acquiring a multi-billion dollars in the company in exchange money if necessary to repay debt.
Qatar Prime Minister and CEO of the investment fund at the time.
Then, the Qatari government abruptly decided not to invest in Porsche, reportedly at the urging of the head of government of Lower Saxony Wulff and Merkel and Chancelor, they invest more in Porsche after cleaning up its finances and resolved his situation with Volkswagen Qatar provide later an infusion of money to the company, but only after it was too late to save an independent Porsche.
With a healthy balance sheet money, support from the German government and Qatari money waiting in the wings, Volkswagen had sufficient funds to collect the wounded Porsche Moreover, Porsche owned by Volkswagen nearly a billion dollars and that would be due soon.
After remaining publicly quiet on the merger for years, Pi ch began rumbling about his loss of confidence in the Wiedeking and Porsche management team and their mismanagement of loan financance company's VW would come with strings attached.
The strings, as it appeared, would be that Porsche will sell to Volkswagen other Volkswagen force him to repay the loan In July 2009, the Porsche CEO Wiedeking resign The starting 71mm package he received suggests wasn t entirely voluntary, but place would open the way for Volkswagen acquisition of Porsche Wiedeking flew too near the sun, and now his career at Porsche was over.
In autumn 2009, the acquisition has been Volkswagen would acquire the automotive industry for 11 Porsche 3BN 49 in cash immediately, and 51 later, for tax reasons, the Porsche family would retain its shares in a holding company owned 50 Volkswagen - but also the entire Porsche debt Qatar fund, however, provide capital to the holding company Porsche to help eliminate this debt.
Considering that they searched for their family business, the Porsche-Piëch family has done quite well for themselves all said and done, they ended up owning about 32 Volkswagen at the end of negotiations; a few years later, they bought the shares they sold to Qatar.
But a member of the Porsche-Piech family has been particularly Ferdinand Pi ch Under his leadership, Volkswagen took control of Porsche - the company began his grandfather's interest in Porsche became an issue both Volkswagen and Porsche; today, it is worth several billion dollars.
So what is to be learned from the saga of Porsche.
First, if you are a car company, it's probably best to focus on making cars instead of financial maneuvers gravity defying Wendelin Wiedeking Porsche ran brilliantly when he was just a car company, it has modernized its operations successfully added new products, and turned the company from bankruptcy nearly a highly profitable business it was only when Porsche started making more money from its hedging activities as funds that it is automobiles that Wiedeking by his comeuppance and was arrested when he left 71mm wasn t so bad.
On the other hand, capital tends to be there when times are great, but disappears when you need it The different parts of the economy are strongly correlated So when your business turns sour, many others businesses turn sour, including bank Any business strategy that requires access to capital to succeed can be Shakey, because capital may not be available during the stress periods.
Finally, if you're going to go get the king, not to be missed for Porsche to acquire Volkswagen, they need to acquire 80 of the company and to revoke the rule Volkswagen - which allowed the local German government to block any acquisition When the rule has not been revoked, the acquisition process has dragged on and undermined the financial reserves of Porsche.
All this gave Ferdinand Pi ch time to wait and see what would happen and at the first sign that Porsche was in trouble, Pi ch decisive hit and took over the business from his grandfather.
And finally, after decades of waiting, he became the head of Porsche Or rather, he became the boss of Porsche boss anyway Pi ch is without doubt responsible.
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The Porsche Hedge Funds that cars were also, porsche, cover, fund did.