Wendelin Wiedeking

[Dottore]

So the long knives are out for the former Porsche CEO.

This weeks Manager magazine features a cover story about what it calls the "biggest corporate crime story in Germany's history", namely Porsche's attempt to take over VW last year. The German Justice Department has now painted Wiedeking as the evil genius, and is out for blood. The title reads "Hunting Wiedeking".

It's a remarkable story that is just coming to light. Very complex. Very Wagnerian. Porsche vs Piech. Intrigue in high places. If anyone is interested, I'll try to summarize the article in a few paras, but it seems our boy is in serious shyte.

[cairns]

If you could summarize it that would be great. IMO it's a fascinating story of double dealing and backroom intrigue.

Motto being you don't f*ck with Ferdinand (Piech). WW got owned and Porsche did too.

[Seahawk]

I would enjoy a summation...

[Por_sha911]

Which proves once again that writing history goes to the victors. If the economy had stayed good for 6 more months and he had pulled it off the article would have hailed him as a corporate genius and he'd be writing a how-to book.

[BGCarrera32]

Agreed. They're all pi$$ed because he had a golden parachute. Had he pulled it off he'd be Germany's superhero.

[Z-man]

Wonder how he compares to Jurgen Schremp, the 'mastermind' CEO who orchestrated the Daimler-Chrysler merger.

Seems German automaker CEO's are egomaniacs.

-Z-man.

[cairns]

"Seems German automaker CEO's are egomaniacs."

+1

The point is the economy tumbled and he didn't see it. And he bet the company that it wouldn't.

He could have used that money to give the Porsche customer more value for the $ (remember how cheap the early 996/986 interiors were?), do more IR&D, enlarge the racing program etc. In short, put the money back into the company and increase it's value. Instead he thought he could buy VW and in the end Porsche lost it's independence. A sad but fascinating story.

[Jagshund]

I was just cursing about this again early this morning. No idea why it hit me at 0400, but I had been looking for a position with Porsche for years mostly because of their business acumen.

Ol' Wendy kind of threw that out the window, though, didn't he?

[Rick Lee]

Dottore, got a link? I'd like to read this.

[Joeaksa]

Home - manager-magazin.de

At least you and I can read it in German the way they wrote it. Hate to see screwed up translations.

[Rikao4]

Rick, google Deutschland has it..
sorry..I'm link challenged

thank you Joe

folks lost $$$..
when it was going great..
he was great..
now, like here...
he's the buggie man to blame...
like D said...this was complex and pure genius on his part..
until Mr Murphy came along...

Rika

[Dottore]

Originally Posted by cairns

Motto being you don't f*ck with Ferdinand (Piech).

Yup. That's the really short summary! I'll do a slightly longer one tonight.

[Dottore]

Originally Posted by Z-man

Wonder how he compares to Jurgen Schremp, the 'mastermind' CEO who orchestrated the Daimler-Chrysler merger.

.

Schremp is widely considered a lightweight and fool.

WW on the other hand was considered a brilliant Manager. Won Manager of the Year in Germany and Europe several times.

[Rick Lee]

Originally Posted by Dottore

WW on the other hand was considered a brilliant Manager. Won Manager of the Year in Germany and Europe several times.

This kind of stuff really makes me question others' judgment. It's like reading polls in the US on some politician's honesty and integrity. If they're popular, they're honest. If they're not, they're not. What are the odds that a middle aged man just suddenly became a liar or an honest person?

[Z-man]

Originally Posted by Dottore

Schremp is widely considered a lightweight and fool.

WW on the other hand was considered a brilliant Manager. Won Manager of the Year in Germany and Europe several times.

So what? At the end of they day, they both nearly ruined a car company.

It doesn't matter if you are a lightweight fool or a billiant manager -- once you start letting your ego call the shots, it is all downhill from there...

-Z-man.

[cairns]

FWIW my rudimentary German says that they're expanding the investigation of WW and they believe he illegally manipulated the price of VW stock. It also (if I understand correctly) states that pressure to expand the investigation came from the US (VW Group? can't tell). At any rate it appears he's in deep ka-ka and that his manipulative stock manuevers apparently violated German law.

He's looking more and more like a German Gordon Gecko. May have been brilliant but with a badly flawed character.

[Por_sha911]

Originally Posted by Z-man

Seems German automaker CEO's are egomaniacs.

Fixed it for you:
"Seems CEO's are egomaniacs."

And frankly, it can also read: "Seems most auto people are egomaniacs"

[enzo1]

not trying to hijack, but this is a good book about Vw and BMW purchase of Rolls and Bentley ......

[Dottore]

I’ll try to keep this simple.

There are two separate cases faced by Porsche and it’s former management:

1. First: A German criminal proceeding for fraud and market manipulation. The allegation is that Porsche (WW) fraudulently misrepresented the extent of its shareholding in VW at a time when it was negotiating large loans from a number of banks. Apparently at material times Porsche (WW) claimed to control 75% of VW, when in fact it’s actual ownership of VW was closer to 43%. The 32% difference is accounted for by a complex series of put and call options held by Porsche and others which theoretically entitled Porsche to purchase the additional VW shares—provided it had the funds to do so (which it didn’t).

2. Second: Several US hedgefunds are hoping to sue Porsche in the US for many billions of dollars based on their losses from short selling VW shares. Why? These hedgefunds claim that Porsche and WW assured them that they would not increase their holdings in VW beyond 43%, and that this limit had been reached. At the time analysts agreed that VW shares were overvalued, and that when Porsche stopped buying VW shares the price would collapse. Based on this analyses and Porsches statement that it had stopped buying shares in VW, the hedgefunds shorted VW stock on a grand scale. A short time later, Porsche announced that it now “controlled” 75% of VW (based on its put and call options). The hedge funds panicked, and scrambled to buy VW shares in order to meet the obligations under their short sell contracts. This caused VW shares to climb from 200Euro to over 1000Euro in only four days, leaving the hedgefunds with enormous losses. At the same time, for the day or two that VW shares were at 1000Euro, Porsche (WW) sold some of it VW options for a profit of well over 5 billion Euro. The hedgefunds were pissed, and WW was laughing. The hedgefunds are suing for misrepresentation. There is still an issue as to whether a US court has standing to hear the case, but this issue is expected to be decided in favour of the US plaintiffs.

3. If the hedgefunds succeed in their claims, Porsche will be bankrupt. Meanwhile VW has put the Porsche merger on hold, because if the hedgefund suit succeeds after a merger, the merged entity (including VW) will be liable for the claim. Porsche is therefore currently in limbo.

4. Insiders say that WW has meticulously documented his personal role in the whole affair, taking no steps in the VW takover without the blessing of arguably the best commercial law firm in the world (Freshfields Bruckhaus Deringer). On the other hand, everyone realizes that justice in US courts is a complete crapshoot where the most important things are not so much facts and law, but rather theater. To this end the hedgefund plaintiffs have hired US star attorney Philip Beck, the same guy who successfully represented George W. Bush in the Florida election recount debacle etc.

5. Meanwhile WW’s house and cars and offices have all been searched, and countless documents and data already been secured by the German Justice Department.

That’s the Coles Notes summary of the state of play at the moment. Stay tuned.

[cairns]

wow. thank you.