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Finance Chief Poetsch Close To Taking Over Piech Job

Finance Chief Poetsch Close To Taking Over Piech Job.

Investors Seeking Outsider Shakeup Disappointed.

Volkswagen finance chief Hans Dieter Poetsch will replace Ferdinand Piech as chairman, if he is supported by the supervisory board, and wins a shareholder vote at a meeting in November.

The likely appointment was immediately denounced by some investors who believe the sprawling and profit-challenged VW group needs an outsider who might be more inclined to shake up what they consider to be a complacent company.

One favoured outsider was Continental Chairman Wolfgang Reitzle.

Any attempt at radical reform at VW can be blocked by unions who have half the votes on the supervisory board, while Lower Saxony has a 20 per cent stake too which has veto power. The Porsche and Piech families control a majority of VW’s voting shares with the Porsche SE holding company.

Evercore ISI analyst Arndt Ellinghorst though liked the appointment. Poetsch has a clear understanding of the key financial problems facing VW, with excessively high capital and R&D spending, and very high labour and material costs, he said, and –

  • The mandate for new VW brand CEO Diess to turn around the VW brand should be supported with a chairman in place who understands the problems in depth.
  • Poetsch has been advocating an increased focus on consolidating VW’s business post an era of M&A.
  • Poetsch understands that VW needs to present a plan on how to achieve the eight per cent plus margin target by 2018. So far there are little details which is part of the reason for investor scepticism.
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