VW chairman denies pushing for chief executive's removal

Volkswagen's chairman Ferdinand Piech broke his silence on the leadership crisis at the German carmaker on Thursday by insisting he is not trying to oust chief executive Martin Winterkorn.

"Mr Winterkorn and I talked it out last week and agreed on the continuation of the co-operation," he told Spiegel Online. "I am not pushing for his removal."

An official at Mr Piech's office in Austria confirmed the comments but declined to elaborate.

The chairman clarified his position after the dpa news agency and NDR broadcaster reported Mr Piech would try again to oust Mr Winterkorn before VW's annual general meeting on May 5.

His declaration marks a ceasefire in a leadership battle that has raged for almost two weeks and destabilised the world's second-largest carmaker by sales.

Mr Piech had made no public remarks since he triggered the power struggle almost two weeks ago by telling the same publication that he was "at a distance to Winterkorn".

Key members of VW's supervisory board - employee representatives, the state of Lower Saxony and Wolfgang Porsche, Porsche chairman - all indicated they supported Mr Winterkorn, leaving Mr Piech looking unusually isolated. The Piech and Porsche families jointly hold 51 per cent of VW's voting shares, and Lower Saxony is another large shareholder with 20 per cent.

VW's top directors met in Salzburg last week, at Mr Piech's behest, and subsequently issued a statement declaring Mr Winterkorn to be the "best possible" chief executive of Volkswagen.

The six-member steering committee proposed that Mr Winterkorn receive a contract extension beyond 2016 but did not say the decision was unanimous.

This prompted speculation that Mr Winterkorn, 67, had won the battle with Mr Piech, 78, but not necessarily the war.

Although the chairman and chief executive have now agreed to co-operate, the company's annual general meeting still threatens to be very awkward for the pair as they must share the same stage.

The dispute has laid bare several problem areas at VW - including its underperformance in the US, its failure to develop an ultra-low cost vehicle for the Chinese market and the low profit margins of the core passenger car brand.

Amid growing worries about China, VW's largest sales market, VW's stock has declined about 9 per cent since the leadership dispute first erupted.

Ingo Speich, portfolio manager at Union Investment, a top 15 shareholder among those that do not have voting rights, told the Financial Times: "Our desire is that these differences of opinion are settled quickly so calm returns to Volkswagen. VW is a very complex carmaker ... and a lot depends on two men. If they are not working well together, then that is not helpful for the company.

He added: "Given the age of the chairman and CEO, it is right that there is a discussion about succession but it should not be conducted in public, as this can only damage VW."

VW said it had nothing to add to last week's steering committee decision.

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