Ferdinand Piëch The Life of a Warrior

Ferdinand Piëch changed the modern automotive industry like no other, making billionaires out of millionaires. Yet he celebrates his 80th birthday having recently left Volkswagen in disgrace. A lookback at the Godfather of German cars.
Mr. Piëch has made a lot of enemies, some admirers, but few friends. Picture source: AP.

On Easter Monday, Ferdinand Karl Piëch – the man who changed the modern German automobile industry like no other – will celebrate his 80th birthday in a small, trusted family circle. There will be no celebration, no big fanfare and nothing like the grand tributes he received for his 70th birthday in Wolfsburg or 75th in Dresden.

Indeed, after such a deep fall from grace, celebrating will not be easy. Mr. Piëch is no longer head of the supervisory board of Porsche SE, the principle shareholder of VW. Instead, he has become embroiled in the complicated web that is VW’s Dieselgate scandal. He will probably leave the board altogether within the next few months.

But his legacy in Germany’s vaunted automotive industry remains: Mr. Piëch was the one who put Porsche back on center stage by winning Le Mans. He freed luxury carmaker Audi from the image of building cars for senior citizens, and he led Volkswagen out of a deep crisis to the top of the automobile industry.

At one time, the Porsche-Piëch clan that runs VW owned a little sports car manufacturer and a large car distributor business. Today, they hold the majority share in an industrial giant that, even despite Dieselgate, built more cars in 2016 than any other carmaker in the world. Without Ferdinand Piëch, this would have never happened.

In the end, he had a falling out with everyone. Mr. Piëch abruptly departed from VW in the spring of 2015, the result of a power struggle with ex-chief executive Martin Winterkorn months before the Dieselgate scandal became public. More recently, Mr. Piëch burned further bridges by telling prosecutors that he had pointed out problems with VW’s diesel emissions in good time internally, testimony that implicated other executives including Mr. Winterkorn for knowing more than they admit publicly. His cousin Wolfgang Porsche, head of the clan, as well as supervisory board member Stephan Weil, the premier of Lower Saxony, deny the charges.

On his 80th birthday, Ferdinand Piëch is something like a grand war memorial that the world looks upon with respect, but also with a sense of loss. So who is the man many consider the last Godfather of the auto industry? We look at seven aspects of his personality and the people that shaped him.

I. Ferdinand the Last

Born in Vienna, Ferdinand Karl Piëch was inspired most by his famous grandfather on his mother’s side, the legendary Ferdinand Porsche. Porsche invented the VW Beetle and built the first VW plant on the flatlands of northern Germany in 1938 with the help of the Nazi regime. Pressure to gain the approval of his grandfather was part of Mr. Piëch’s upbringing.

Having lost his father at the age of 15, Mr. Piëch gradually grew into the family’s gladiator, proving to be a little better, tougher and more obsessed with the business than the children of his uncle “Ferry” Porsche, the brother of his mother Louise. Ferry Porsche handled sports car production in Stuttgart-Zuffenhausen, and many of his children attended alternative-education Waldorf Schools. Ferdinand Piëch, however, was forced to attend boarding school in Zuoz, Switzerland. He would often sum up his time there with the words, “I grew up as a domestic pig and was forced to live as a wild boar.” Indeed, he would not rest until he had taken grandpa’s inheritance with the name of VW to new heights.

II. Business is War

Fitting to his pugnacious attitude, the word “war” appears surprisingly often in Mr. Piëch’s interviews and speeches. Some say he lived his life in a constant state of battle, while others speak more lightly of competition. This certainly applies to the way he exchanged blows with the Americans and with the Japanese. Early on, Mr. Piëch concluded that only five to 10 large automotive groups could consistently remain on the global market. Which is why he eventually decided that VW needed “sharpshooters to lead them.”

Specifically, he saw this as the job of product development and marketing, which must operate like “an air force and an army.” It soon became clear that, with this military logic, Mr. Piëch was not looking to be fourth in Europe, but first in the world. “Piëch was dyslexic and never learned how to express himself in a politically correct way,” said a long-time associate. His messages were essentially war reports and recognition of achievement.

He completed his masters in engineering at the Swiss Federal Institute of Technology in Zurich in the record time of eight semesters. The man who had once wanted to build airplanes instead wrote his thesis on the design of a Formula-1 engine with 12 cylinders. In a family of auto-autodidacts, Mr. Piëch had become an auto-academic. And this was a unique position.

III. The Narcissist

Some say this made Mr. Piëch into a narcissist. However, he was less interested in looking in the mirror than at, in and under one of the car models he created. That’s where he saw his own reflection. “This genius was good inside the niche, but bad outside the niche,” said an ex-VW executive. But this is also what made Mr. Piëch different from an all-rounder who is average in everything he does.

Mr. Piëch can only speak in depth and at length about cars: full galvanization against rust, the five-cylinder gasoline engine, all-wheel drive, the TDI engine or platform strategies.

These would all become part of his technician’s identity; a boss who is as fascinated with a one-liter car as with a 1001 PS car from Bugatti. He would go on to purchase the latter brand, as well as Bentley and Lamborghini. Even the trucks from Scania and MAN, and the motorcycles from Ducati, would eventually find a place in Mr. Piëch’s empire of brands.

At his first employer, Porsche, which was run by his uncle “Ferry”, Mr. Piëch secretly designed high-speed racing cars as head of the development department. It took a mere 25 versions of the sinfully-expensive Porsche 917 (top speed 384 km/h) until Porsche won the 24 Hours of Le Mans, the world's oldest and most renowned endurance racing competition, in 1970.

For Mr. Piëch, Le Mans remained an important stage. But his ambition and fanaticism had begun to scare his cousins at Porsche. Which is why at the start of the 1970s, he would go on to pursue his career in Ingolstadt with a subsidiary, Audi. Moving from senior departmental head to head of a division to chief technical officer, Mr. Piëch would continue wrestling with parent company VW. When Porsche was again close to ruin, Mr. Piëch was sent – per exemption clause – to come to the rescue. By that time he had already long fixed his gaze on Wolfsburg as the ultimate destination.

IV. His Favorite Enemy Wiedeking

By now, Mr. Piëch’s rivalry with the Porsches was out in the open. That the self-styled Crown Prince Ferdinand openly had a relationship with his sister-in-law Marlene Porsche, which resulted in two children, didn’t exactly help to minimize tensions. Mr. Piëch made no bones about how he felt about his cousin Wolfgang “Wopo” Porsche, who headed the clan. For the private school warrior, Wolfgang the Waldorf school grad was soft and weak.

Instead, his true adversary on equal footing was a man whom Mr. Piëch himself had recommended to save Porsche: Wendelin Wiedeking. Like Mr. Piëch, Mr. Wiedeking had adapted production techniques based on the Japanese model, and in the process managed to turn around Porsche itself, based in Zuffenhausen. The Porsches, led by Mr. Wiedeking, not only wanted to purchase into VW, but to take over the whole company.

This was prevented by both the financial crisis and Ferdinand Piëch’s leadership of the VW supervisory board, which began in 2002. Today, Mr. Wiedeking, who was forced out in 2009, calls Mr. Piëch a “gifted developer of cars and motors”.

“In his plants, nothing rolled off the line that he had not inspected closely himself,” Mr. Wiedeking told Handelsblatt. “He always wanted the technical optimum – this didn’t always have to be cost-efficient. This he then left up to others.”

In this sense, it was consistent and correct, Mr. Wiedeking said, that the leadership of the Porsche brand be left to hired executives: “Only this way were the Piëch and Porsche families able to make billionaires out of poor millionaires.”

He added that when working directly with him, Ferdinand Piëch was not as stable as the engines and vehicles he designed.

“Headstrong at idle speed, he didn’t always keep his directional stability nor his promises, including sudden lane-changes,” Mr. Wiedeking said. “To think he was ‘behind’ you on the board was always a risky game.”

V. Cherchez la Femme

A headstrong and yet a strange man: Many people feel the same way as Mr. Wiedeking, but don’t say it. The number of male friends that Mr. Piëch had disappeared as the influence his second wife Ursula (born Plasser) had on him grew. He lived with her in Salzburg, Austria and they had three children. Their close relationship explains some of the later disagreements he had with veteran VW chief executive Martin Winterkorn, once a loyal paladin, who not only bought a house in Munich from Mr. Piëch’s hated cousin and clan head “Wopo”, but also supposedly did not demonstrate enough severity during Mr. Wiedeking’s attempt to take over VW. Mr. Winterkorn also supposedly ignored comments by Ursula Piëch when she was temporarily active on the board and charged with improving aesthetics, design and the rear lights of his vehicles.

The 60-year-old woman from Austria was the first consultant able to get her “Karl” to stop with a slight touch of his arm during the many all-too hefty rounds of accusations leveled at “Wopo” and the rest of the clan, according to people who were present during such exchanges. At one time she was supposed to be something like the guardian of the family inheritance that was tied up in foundations.

The foundations still exist – the Ferdinand Karl Alpha Privatstiftung, Ferdinand Karl Beta Privatstiftung – but a solution this was not. In the final analysis, Mr. Piëch was not powerful enough to carry through on this. He has now sold the majority of his shares, 14.7 percent. Most were bought by his younger brother Hans Michel. The shares of the VW principal shareholders Porsche/Piëch will be divided up among the fourth generation, making the owner situation even more complex.

VI. Machiavelli of the Engine

When you love power, scruples only distract from this love. In this sense, Ferdinand Piëch is an intense lover who led by the motto, “either I see us in the black in half a year – or new faces.”

Mr. Piëch knows all the tricks. If necessary, he can be strategically silent for five minutes. He is calculating and knows how to create the atmosphere he wants. When his climb toward the top job at Audi was in jeopardy, he told Playboy magazine that he could always work as an airplane designer or go to Japan. Mr. Piëch got the job. Part of his Machiavellian tactics included a record number of times he celebrated his subordinates. But his need for harmony was limited. He admitted himself that he is not “easy to take” and apparently drew his enormous ability to get his way from seminars on group dynamics.

And yet he also allowed people a lot of freedom in their work, avoided layoffs and concluded marriages of convenience with employee representatives, unions and politicians. His alpha-male friendship with Gerhard Schröder, the former German chancellor who was once the state premier of Lower Saxony and member of the VW Supervisory Board, is the one most people remember. But others in the network also got advantages: works council chairman Klaus Volkert could do what he wanted, including charging brothel visits to the company as operating expenses. Mr. Piëch insists that he knew nothing of this.

The commander surrounded himself with warriors he handpicked himself, like José Ignacio López, who came from Opel with followers and boxes of documents. As a VW board member, the Spaniard rationalized to the extreme and liked calling it “feeding the warrior spirit.” Accusations of industrial espionage by Opel’s parent company GM were settled at a later date.

VII. Fear? Only of Pirates

Mr. Piëch has made a lot of enemies, some admirers, but few friends. Among the latter was ex-VW supervisory board chairman Klaus Liesen, who recently passed away. Although he needed friendship, Mr. Piëch would not let people get close to him. He alternated between hubris and self-discipline. It was enough for him to be feared. He accepted this.

Privately, he still possesses a fortune worth billions, which is also invested in hotels and real estate in Dubai and Abu Dhabi, according to people close to him. After all he’s been through, he fears nothing expect pirates on the open sea. That’s why he cancelled his plans to sail around the world after resigning from the board at VW.

The man who followed in the footsteps of company founder Ferdinand Porsche might be a lonely person, but despondent he is not. In the magazine Automobilewoche, Mr. Piëch spoke out last week and expressed his worry about his life’s work. “Please don’t forget the customers. They are essential for the existence of the company,” he advised VW employees. Between the lines, this meant “You’re too busy with yourselves.” When asked which cars were most important to him, he named the Audi Quattro, which is important to the masses. The others are a bit more special: the Porsche 917 from Le Mans was historic, a Bugatti Chiron (1,500 PS) that only a few people can afford, the VW Phaeton no longer being produced, and the one-liter car VW XL1 which was never produced. Mr. Piëch’s war might be over, but he doesn’t really want to leave the battlefield.

Hans-Jürgen Jakobs is a senior editor at Handelsblatt based in Munich and a former co-editor in chief of the paper. To contact the author: [email protected]