New Structure
June 27, 2007
Shareholders at Porsche have approved a new structure for the luxury German sports car maker. Chief executive Wendelin Wiedeking told an extraordinary general meeting on Tuesday in Stuttgart that Porsche would be converted into a holding company.
Under the new holding, Porsche's operational business will run as a separate full subsidiary. Independently to this, the holding company will manage Porsche's interests in Volkswagen (VW). Porsche raised its stake in VW earlier this year from 27.3 percent to 30.8 percent.
Wiedeking told the meeting that it was important for the shareholders to be committed to this new course. The some 1,500-strong audience, however, did not directly vote on the changes. Due to Porsche's structure, only shareholders with voting power have a say in the matter. These are the families Porsche and Piech.
Investors also agreed to change the corporate designation to a Societas Europaea, a company registration recognized across the European Union.
No marriage planned between Porsche and VW
Wiedeking told the shareholders that there were no plans to merge Porsche and VW.
"Not only will there not be 'a marriage made in heaven,' but no, we're not even going to have a marriage here on earth," he said, in reference to the phrase used by former Daimler CEO Jürgen Schrempp before the merger of Daimler and Chrysler.
According to Wiedeking, no decision had been made to increase the stake in VW further.
"But of course we're continuing to watch the market to see what's possible," he said.
Wiedeking said, though, that he was still not satisfied with the progress of the restructuring at Europe's biggest carmaker.
"The Volkswagen group's cost structures are not right yet and there are still too many blank spots on VW's world map, when it comes to profitability in individual markets," the CEO said.
New profit record expected
Porsche said it expected to set a new profit record for the business year ending July 31.
"Considering the 10 months of the year so far, it is not difficult to predict that our annual earnings at the end of this business year, will be significantly -- and I mean, significantly -- better than the 2.1 billion euros ($2.8 billion) in the previous year," Wiedeking said.
This was due to gains tied to Porsche's stake in VW and to solid car sales.
For the upcoming 2007/2008 fiscal year, Wiedeking said Porsche expected further momentum from the new 911 Turbo Cabriolet scheduled to make its worldwide debut on Sept. 8.