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No Fast Cash from Porsche, Appeals Court Rules

Hedge funds lose again when it comes to the German maker.

by on Aug.18, 2014

Hedge funds lost another round in court over a suit stemming from Porsche's attempted takeover of Volkswagen, which saw Wolfgang Porsche, left, and Ferdinand Piech, chairman of VW, on the same team, but with VW in charge.

In what many might consider karma, dozens of hedge funds looking for a payoff from the controversy surrounding Porsche failed bid for Volkswagen AG suffered were shot down in court: again.

The U.S. Court of Appeals for the 2nd Circuit in New York City upheld the dismissal of a lawsuit by a group of more than two dozen American and British hedge funds that claimed to suffer big losses in the fall of 2008 when Porsche executives manipulated the company’s holdings of Volkswagen stock in what turned out to an abortive bid to take over VW.

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Porsche had started buying shares in 2006 but ultimately the plan collapsed during the financial crisis that followed the collapse of Lehman Brothers. (more…)

VW, Porsche Will Complete Merger After All

On-again/off-again tie-up to take effect in August.

by on Jul.05, 2012

Vanquished and victor - Porsche Chairman Ferdinand Porsche meets with VW Chairman Ferdinand Piech.

The on-again/off-again tie-up of Porsche and Volkswagen finally is set to be completed after a series of potentially costly snags that threatened to scuttle the deal.

The marriage – which follows an abortive David-and-Goliath effort by the smaller maker that triggered an assortment of lawsuits and a feud within the extended Porsche family – is “expected…to take effect as of August 1, 2012,” Volkswagen says.

Despite earlier fears that the tie-up could leave them vulnerable to billions of dollars in legal costs due to those lawsuits, the makers now contend the merger will generate a “clearly positive impact on consolidated profit(s).”

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“We will concentrate all our strength on the operative business and the solid, profitable growth of the company,” says Volkswagen CEO Martin Winterkorn, adding that the newly combined firm should achieve “long-term synergies of about €700 million per year.”


VW/Porsche Merger Likely Dead, But Makers Still Expanding Ties

VW to start building Porsches later this year.

by on Mar.19, 2012

Porsche CEO Matthias Muller with the newly redesigned Boxster at the car's Geneva Motor Show debut.

The on-again/off-again Volkswagen-Porsche merger appears to have moved into the indefinite hold category, but that doesn’t mean the two German makers won’t expand their ties.  In fact, VW will begin producing the all-new Porsche Boxster, later this year, alongside the Golf Cabriolet.

With Porsche facing numerous lawsuits over its failed attempt to pull off the David v Goliath acquisition of larger VW, several years ago, the potential financial liabilities have all but scuttled a merger, Porsche officials suggested during a meeting with industry analysts.

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The meeting “confirmed our view that a merger of Porsche and VW is not possible,” said analyst Jochen Gehrke, of Deutsche Bank, though the smaller maker did confirm that it will continue expanding its relationship with its bigger rival.


VW More Than Doubles Profits in 2011

Sales up nearly 15% as maker punches past Toyota.

by on Feb.24, 2012

Workers assemble a 2012 VW Passat at the maker's new assembly plant in Chattanooga.

If the latest numbers are any indication, Volkswagen is clearly on its way towards world domination.  The German maker is reporting that its profits more than doubled last year while global sales jumped 14.7%.

Volkswagen, no longer limited to the “people’s car,” but owning or partnering with a dozen different brands, has set out a goal of ending the decade as the world’s largest automotive manufacturer.  It didn’t quite get there in 2011, but with sales soaring to 7.2 million it punched by struggling Toyota, landing second only to revived U.S. giant General Motors.

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But shareholders and analysts are, for the moment, focusing on the earnings numbers, which totaled 15.41 billion Euros, or $20.5 billion, up from 6.84 billion Euros in 2010.  The latest figure is a full 1.5 billion Euros ahead of what analysts had been collectively forecasting – and triple what rival GM earned in a record year of its own.


Porsche Aims to Double Volume with New Models

Maker counting on emerging markets but sees more opportunities in U.S., Europe.

by on Nov.09, 2011

The planned Porsche Cajun will be one of a number of new models the maker is planning, company officials told

Porsche intends to more than double its current global sales volume – while maintaining its position as the world’s most profitable carmaker – with the steady addition of new products.

The maker believes that much of its growth, going forward, will come from emerging markets like China, Russia and India, but it also believes there’s a significant opportunity to build demand in established markets such as the U.S. and Europe, company officials stressed during a California preview of the 2012 Porsche 911 Carrera S.  (For a review of the 7th-generation 911, Click Here.)

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“It is our objective to remain the world’s most profitable auto manufacturer,” said Porsche Board Member Wolfgang Hatz.

That doesn’t necessarily mean the German maker can keep up with a Toyota or Volkswagen – in terms of raw dollars – but on a percentage basis it is setting the benchmark, with a target of holding at a 15% Return on Sales, or ROS, and a Return on Investment, or ROI, of 21%.


VW – Porsche Merger Delayed and Possibly Dead

Liabilities too high, warns Volkswagen.

by on Sep.09, 2011

Former Porsche Chief Wendelin Wiedeking's attempted acquisition of VW has led to major legal problems.

There are a growing number of skeptics wondering whether the formal merger of Volkswagen and Porsche will ever be completed or whether they might leave each other at the altar.

The tie-up was triggered by Porsche’s abortive attempt, in 2009, to buy out its German rival.  Struggling under massive debt and unable to complete the David-v-Goliath takeover, the smaller maker said it would become the latest brand in VW’s growing portfolio.

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But the consolidation has proven harder than anticipated to complete, even though a former VW executive is now running day-to-day operations at the Stuttgart sports car company.  According to German reports, VW will either have to exercise an option to buy out the 50.1% of Porsche it doesn’t already own or the two will need to reshape their current agreement.

A statement from VW insists that, “All parties remain committed to the goal of creating an integrated automotive group…and are convinced that this will take place,” but the kicker suggests there’s less confidence than this suggests,  The statement also cautions that VW will now, “analyze whether other potential courses of action exist.”


VW/Porsche Merger at Risk

German prosecutors expand investigation of sports car maker.

by on Feb.24, 2011

Former Porsche CEO Wendelin Wiedeking is one of several executives under prosectors' scrutiny.

The planned merger of Porsche with the bigger German automaker Volkswagen AG is likely to be delayed – and may be called off entirely – as the result of an intensifying investigation of actions taken by current and former Porsche executives.

German prosecutors are looking into possible market manipulation, breach of trust and credit fraud stemming from the abortive effort by Porsche to take over its bigger rival.  Among those under the microscope are former Porsche CEO Wendelin Wiedeking, the executive who triggered the attempted acquisition before being forced out when his company had to concede defeat.

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As part of a settlement, the debt-laden Porsche agreed to allow itself to instead be taken over by Volkswagen.  But that plan, Porsche officials today acknowledged, is now in jeopardy.

For their part, prosecutors in Stuttgart, home to Porsche, said three executives are facing accusations they provided “false or incomplete information” to banks involved in the planned takeover’s financing.


Another Shake-up at Porsche; Macht Out as CEO

VW cements its control.

by on Jul.06, 2010

New Porsche CEO Matthias Mueller.

Further cementing its hold on the long independent Porsche AG, German rival Volkswagen has appointed its top car-model strategist to run the sports car company.

Matthias Mueller, 57, is the new chairman of the board of  Porsche management, moving from Volkswagen AG where he was in charge of product Planning and product management and model series for the VW Group and the Volkswagen Brand.

Effective October 1, Mueller will replace Michael Macht, 49, who was appointed a member of the board of management of Volkswagen AG. In the future Macht will be responsible for the Production Division and, as a result, the control and coordination of all plants within the Volkswagen Group.

“Contributing (his) knowledge, he guarantees that Porsche, as a world brand, will not only maintain, but further expand its top position,” Dr. Wolfgang Porsche, Chairman of the Supervisory Board of Porsche AG, said of the new sports car maker’s CEO.

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Mueller’s appointment was viewed as an indicator Porsche would work more closely with VW as it developed new products in the future.

“Matthias Mueller gives us the exceptional competence of an outstanding product expert benefiting the interaction of independent brands within an Integrated Automotive Group leading the market worldwide,” added Chairman Porsche.


Porsche Bucks (Euros?)Trend, Pays Bonuses

Automaker hopes to maintain workers during rough transition.

by on Oct.08, 2009

Porsche workers will take home bonuses worth more than $1,500 each, but ousted CEO Wendelin Wiedeking's golden parachute is more like $70 million.

Porsche workers take home bonuses worth more than $1,500 each; ousted CEO Wendelin Wiedeking's golden parachute is $70 million.

These days, simply getting a paycheck seems to be good news, what with automakers and auto suppliers slashing jobs at a frantic pace.  But the German sports car manufacturer, Porsche, is bucking the trend.

The Stuttgart-based maker recently lost a contentious battle for domination with Volkswagen AG, and there’s plenty of uncertainty about its future as it prepares to be folded into the industry giant’s vast empire.  So, to keep its well-trained workforce from bolting, Porsche has announced it will hand out bonus checks of about $1,500 each to its 12,500 employees for the recently concluded fiscal year.

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In other times, that would’ve been a distinct disappointment since the bonus figure will be down a hefty 71% from a year ago.  But consider that Porsche may wind up one of the only major automaker handing out any bonuses at all during this, the worst global automotive downtown since the end of World War II.


Volkswagen Now Likely to Swallow Porsche

Porsche's Wiedeking may fall over failed bid to buy bigger VW.

by on Jul.20, 2009

Wendelin Wiedeking has helped turn Porsche into one of the world's most profitable automakers. But he could take the fall for an abortive bid for VW.

Wendelin Wiedeking has helped turn Porsche into one of the world's most profitable automakers. But he could take the fall for an abortive bid for VW.

Is the man responsible for Porsche’s dramatic success, over the last decade, about to take the fall for the German maker’s bold but seemingly futile David-v-Goliath bid to acquire rival Volkswagen?

But from a financial standpoint, at least, Wendelin Wiedeking could make out well should he be forced out as Porsche’s chief executive officer, according to industry sources, who say the hard-driving German manager could claim millions for, among other things, the profit sharing bonuses he’d have stood to collect had he completed a contract now set to expire in 2012.

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For months, VW and Porsche have been locked in a bitter battle for control that is, in many respects, a familial melee, the latest in a long-running dispute between the two wings of the Porsche fortune.  Ferdinand Porsche helped create both VW – where heir Ferdinand Piech reigns supreme – and Porsche – where Wolfgang Porsche serves as chairman.