VW supervisory board members to consider leadership dispute

Volkswagen chairman Ferdinand Piech will meet other senior supervisory board members on Thursday to try and thrash out a deal to end a leadership crisis at the world's second-biggest carmaker by sales.

The steering committee meeting follows Mr Piech's decision on Friday to withdraw his support from long-serving chief executive Martin Winterkorn, 67.

Mr Piech's statement on Friday - "I am at a distance to Winterkorn" - destabilised the company and has triggered frantic behind-the-scenes diplomacy to try to end the impasse.

The chief executive's fate hangs in the balance. Mr Winterkorn, Germany's highest paid executive with a salary of €15.9m last year, has the backing of VW employees, who control half the seats on the supervisory board, as well as of Lower Saxony, which owns 20 per cent of VW voting shares and has two board seats.

The Piech and Porsche families between them control 51 per cent of the voting shares at VW.

The Porsche family said at the weekend Mr Piech's comments about Mr Winterkorn represented his opinion and were not cleared with them first.

The VW steering committee comprises Mr Piech, his cousin Wolfgang Porsche, chairman of Porsche, Stephan Weil, prime minister of Lower Saxony, plus employee representatives.

Mr Piech has a history of dispatching executives who fall out of favour and tends to get his way on key matters.

Mr Piech, one of the industry's most colourful figures, is set to celebrate his 78th birthday on Friday.

"We would not bet against Ferdinand Piech. It is very obvious that the VW chairman has a game plan and his public statements are not coming without his clear view on a new leadership team for the company," said Arndt Ellinghorst, analyst at Evercore ISI.

"If Piech presents an acceptable successor we believe the board will support him. Winterkorn would leave with respect for what he has achieved at VW."

Any solution would need be put to the full 20-member supervisory board which includes representatives of VW shareholder Qatar Investment Authority, the Qatari sovereign wealth fund.

Mr Winterkorn's contract extends until the end of 2016, while Mr Piech is due to step down as chairman the following year.

Mr Winterkorn let it be known at the weekend he does not intend to give up his position as top manager without a fight but his chances of succeeding Mr Piech as chairman now appear slim.

Matthias Mueller, Porsche's head, has been touted as a candidate to succeed Mr Winterkorn.

Mr Mueller, 61, seemed to rule himself from the race to become the next VW chief executive in January when he said he was "too old".

But the following month he was promoted to the VW group executive board and soon after remarked: "I am not too old for anything."

A VW spokesman declined to comment. A Porsche spokesman was not immediately available for comment.

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