The sudden resignation of Volkswagen Group Supervisory Board Chairman Ferdinand Piech last Saturday over a showdown with CEO Martin Winterkorn had created uncertainty among its employees. VW said that Piech, a principal figure at the automaker for over 20 years and the grandson of the VW Beetle’s inventor, also quit as a supervisory board member as well as from any other roles within the VW Group.
According to a panel of senior supervisory board members at the automaker, Piech’s unexpected departure was due to a loss of trust. In a statement, the six-member panel said that the steering committee members came to a consensus that because of the events in the last few weeks, the “mutual trust necessary for successful cooperation was no longer there."
The trouble came to light when Piech was quoted by German weekly magazine Der Spiegel that he had "distanced" himself from Winterkorn. The report came at a tricky time since VW is trying to be more profitable by cutting costs and revamping its operations. VW has been struggling in the U.S. and has reported reduced profits at its core autos segment.
A week ago, senior supervisory board members supported the CEO, making Piech lose the vote five to one, and compelling him to agree to a joint statement that backed Winterkorn. Back then, sources said that if he had not publicly supported the CEO, he would have been asked to resign.
Temporarily, the board’s leadership will be assumed by Deputy Chairman Berthold Huber until a new chairman is elected. Ursula, Piech’s wife, had also submitted her resignation from all her posts. Huber said that VW has to resolve the uncertainty among the workers due to this crisis.
According to Weil, the premier of Lower Saxony, which has a 20% stake in VW, Piech had to resign in order to create clarity about VW’s leadership. Weil said that he regrets Piech’s resignation but that it was “unavoidable in the end."
A statement was released by Piech's cousin, Porsche Automobil Chairman Wolfgang Porsche, the owner of 50.7% of voting rights in VW Group. He gave thanks to Piech for the years of “extraordinary and highly successful service” to the VW Group.
He also said that while he regrets what happened, his loyalty to the company and its employees is “unchanged.”