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Philadelphia Business Lawyers: Volkswagen Chairman Resigns Amid Shareholder Dispute

Ferdinand Piech, chairman of the board of Volkswagen AG, ended a 20 year reign at Europe’s largest automaker when he stepped down after a public dispute with other board members. His wife, Ursula Piech, also stepped down from her position on the board. The move was made shortly after Piech failed to draw shareholder support regarding his criticism of CEO, Martin Winterkorn.

Piech served as Volkswagen CEO from 1993 to 2002 and is credited for bringing the automaker back from the brink in the 1990s and transforming it into a global powerhouse that rivals GM and Toyota. Since the time Piech came into power, the company successfully acquired sports-car and luxury brands Porsche, Lamborghini and Bentley; new brands such as Czech car maker Skoda; Ducati motorcycles; as well as MAN and Scania heavy trucks.

A shareholder dispute began last month when Piech publicly challenged the authority of current CEO Martin Winterkorn and dismissed him as a potential successor as chairman. The other board members pushed back, stating that Winterkorn was the best possible chief executive for Volkswagen. Piech has not explained the reasoning behind his attack on Winterkorn. The two had worked closely together for decades.

Winterkorn, who ranks # 58 on Forbes list of the world’s most powerful people, is said to have led the company to record profits since becoming CEO in 2007. Members of Volkswagen executive committee are supportive of Winterkorn’s continued role as CEO and have even suggested extending his contract beyond the end of 2016.

Analysts generally agree that Piech’s departure could be a plus for the company, whose core brand has struggled to keep costs down and gain market share in the United States. In combination with his highly successful career with Volkswagen, Piech was recognized as having a volatile and ruthless management style. Despite his resignation, Piech is still a major shareholder in Volkswagen and can exercise his influence through his stake as well as through the family holding structure, which has rules in place to prevent the sale of public stock.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green Handle all Aspects of Business Law in Pennsylvania

Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. are experienced negotiators, mediators, and litigators in all aspects of business law. Our highly reputable law firm regularly assists clients in cases involving contract negotiations, shareholder disputes, breach of fiduciary duty, and other complex litigation matters. Our business law firm is located in Philadelphia and represents clients throughout Pennsylvania and New Jersey. Call 215-574-0600 to schedule a consultation or submit an online contact form.