Volkswagen chairman appears isolated on board after CEO criticism

By Reuters

Apr 12, 2015 10:43 AM EDT

Volkswagen (VOWG_p.DE) Chairman Ferdinand Piech faces growing resistance within the carmaker's supervisory board to his criticism of Chief Executive Martin Winterkorn.

Piech on Friday publicly withdrew his confidence in Winterkorn who has been at the helm of Europe's largest automaker since 2007, telling German magazine Der Spiegel he has "distanced" himself from the CEO.

Piech's remark was viewed by analysts as undermining the CEO's prospects of renewing his contract, due to expire in December 2016 and to become chairman himself when Piech retires.

"The comment from Dr Piech represents his personal opinion which has in substance and factually not been coordinated with the family," a spokesman on Sunday quoted Wolfgang Porsche, member of VW's supervisory board and chairman of Porsche SE (PSHG_p.DE) as saying.

The comments by Wolfgang Porsche, a cousin of Piech, indicates that the VW chairman, who has spent almost 22 years at the helm of VW, nine as CEO, may be isolated within the supervisory board.

The state of Lower Saxony, where VW is based and which owns one fifth of VW's voting shares, as well as the carmaker's labor leaders who represent half the 20 members on VW's supervisory board on Friday gave their backing to Winterkorn.

Winterkorn, who in his eight-year reign has overseen VW's transformation from a struggling German group saddled with high labor costs into one of the world's most successful automakers, will fight for his job and feels emboldened by support from strong allies, company sources said on Saturday.

Piech's remark has plunged VW into a full-blown leadership crisis at a time when it is seeking to cut billions of euros of costs to boost profitability at its troubled core division while struggling to forge a long-planned alliance of truck brands and to revive operations in the United States.

Holding company Porsche SE, owned by the Porsche and Piech families, controls 51 percent of VW common stock. Members of the two families hold five of VW's 20 supervisory-board seats.

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