The Porsche family descendant who created the Volkswagen empire dies

Ferdinand Piech worked his way up to the carmaker's top job in the 1990s and helped grow it into a global powerhouse

Ferdinand Piech was a grandson of legendary Ferdinand Porsche and longtime chairman of Volkswagen. He died Sunday at the age of 82. Photo: EPA

Ferdinand Piech, the Porsche family scion who built Volkswagen into a global powerhouse, only to exit abruptly shortly before the German carmaker skidded into the diesel-cheating scandal four years ago, has died. He was 82.

His most significant achievement is that he built the largest and most successful automobile company in the world.

Mr Piech passed away "suddenly and unexpectedly" on Sunday, his wife Ursula said in a statement sent to German news agency DPA. German newspaper Bild reported that Mr Piech collapsed after dinner with his wife at a restaurant in Rosenheim, southern Germany, and was rushed to a nearby hospital, where he died.

“Volkswagen wouldn’t stand where we stand now without Ferdinand Piech,” said Bernd Osterloh, Volkswagen’s powerful labour leader and a member of the supervisory board. “We owe him our gratitude and recognition.”

The grandson of Ferdinand Porsche, who laid the basis for the iconic 911 sports car, Mr Piech worked his way up to the Volkswagen top job in the 1990s after cutting his engineering teeth at Porsche and Audi. Admired for his deep technical knowledge and obsession over manufacturing details, but feared for his Machiavellian management style, Mr Piech took over at VW in 1993 when the company was weighed down by huge losses, poor quality and high costs.

About a decade later, Mr Piech moved to the position of supervisory board chairman, having turned around the company — all without large-scale job cuts, a feat that won him the allegiance of powerful labour unions and shareholders alike. Mr Piech continued to guide strategy after becoming supervisory board chairman in 2002. His thirst for acquisitions and empire-building helped VW grow into a global automotive powerhouse that overtook Toyota about three years ago to become the world’s biggest carmaker.

His biggest triumph was the acquisition of the Porsche brand in 2012. The takeover came with a personal twist because Mr Piech was able to turn the tables on his cousin, Wolfgang Porsche, who had pushed the sports-car producer to bid for VW four years earlier. Mr Piech sided with the state of Lower Saxony in northwest Germany, which owns a blocking stake in VW, to rebuff Porsche’s offer just as the suitor’s debt was surging from the takeover effort.

“His most significant achievement is that he built the largest and most successful automobile company in the world,” said John Wolkonowicz, an automotive historian who worked inside VW in Germany as a consultant in the 1990s. “And he built it from nothing.”

The combination of VW and Porsche united manufacturers that trace their roots to Mr Piech’s grandfather, who developed the original VW Beetle car under a contract with Germany’s Nazi regime in 1934. But even before the Porsche integration, Mr Piech had spent years building an all-encompassing automotive emporium, stretching from the diminutive Golf to the supercharged Bugatti. By the end of 2012, Volkswagen either owned outright or held controlling stakes in 12 vehicle brands, including supercar producer Lamborghini, heavy-truck makers MAN and Scania and motorcycle maker Ducati.

His obsession with cars — and the desire to make the best possible ones, regardless of price — also cost VW a lot of money. With the flopped Phaeton sedan, the Bugatti Veyron supercar and Audi’s A2 hatchback, the Volkswagen group accounts for three out of the 10 biggest money-losers in modern automotive history, according to estimates from Max Warburton, an analyst for Sanford C. Bernstein & Co.

Regardless, Mr Piech enjoyed a cultlike following within the company. He typically got his way when he lost confidence in managers, forcing out a series of executives, including his hand-picked successor as chief executive, Bernd Pischetsrieder, in 2006. Three years later he famously insinuated during a dinner in Sardinia that then-Porsche chief executive Wendeling Wiedeking, who launched the takeover attack on VW, had lost his support. The comment marked the turning point in Porsche’s bold attempt to take over its much-larger peer and Mr Wiedeking was eventually forced out.

But in 2015, he lost his grip after fierce internal wranglings and an apparent attempt to install his wife as supervisory board chairwoman to succeed him. The group’s leadership committee also defied Mr Piech in April 2015 by saying it would vote to extend Martin Winterkorn’s contract as chief executive, against Mr Piech’s wishes. A month later, Mr Piech resigned.

“If I want to achieve something, I approach the problem and push it through without realising what’s happening around me,” he wrote in his 2002 autobiography. “My desire for harmony is limited.”

Mr Piech’s legacy was tainted by the spectacular fallout with fellow family members and other VW key stakeholders over who was to blame for the manufacturer’s diesel emissions scandal, which has cost the company €30 billion (Dh121bn) so far and triggered the deepest crisis in its history.

Mr Piech claimed he had mentioned indications of possible wrongdoing to other top officials in 2015 before US authorities uncovered the large-scale emission manipulation months later, but that those warnings weren’t heeded. His allegations were denied by his cousin Wolfgang.

“Dieselgate put the final stain on his career,” Mr Wolkonowicz said. “Most people believe that because he was such a hands-on manager, he probably knew about it.”

Ferdinand Karl Piech was born on April 17, 1937, in Vienna. His father, Anton, was a lawyer, and his mother, Louise, was the daughter of Ferdinand Porsche. The third of four children, Ferdinand Piech had two brothers and a sister.

After attending the Swiss boarding school Lyceum Alpinum Zuoz, near St Moritz, from 1952 until 1958, he studied engineering at the Swiss Federal Institute of Technology in Zurich. In 1963, Mr Piech went to work for his uncle Ferry at Porsche in Stuttgart, where he later became a technical manager.

Mr Piech joined VW in 1972, when he moved to the Audi subsidiary from Porsche after the family decided to end its active role in the sports-car maker’s operations. At Audi, he pushed the development of the Quattro all-wheel-drive system, helping establish the brand as an innovator and later enabling it to overtake Daimler's Mercedes-Benz in global luxury-car sales.

At VW — and above all Porsche — family and business were always intertwined. Mr Piech arranged for his wife Ursula, a former kindergarten teacher and governess for his family during the 1980s, to join VW’s supervisory board in 2012. She resigned alongside her husband in April 2015.

Mr Piech had five children with his first wife, the former Corina von Planta; two from his relationship with Marlene Porsche, the former wife of his cousin Gerhard Porsche; three with Ursula; and two other children.