Lovers of metaphors have had a field day since the boardroom coup at Volkswagen earlier this week. The ousting of the car maker's chief executive meant victory above all for his predecessor, the engineer of the defenestration: Ferdinand Piëch, VW's aristocratic chairman.

Mr Piëch has VW in his blood - his grandfather Ferdinand Porsche designed the Beetle for Hitler - and his move brings the company firmly under the control of him and Porsche, the luxury car maker that he controls and that owns 21 per cent of its bigger rival.

But it has left many investors and German businessmen pondering important questions: can Mr Piëch ever leave VW alone or is he too obsessed with power? And what do the extraordinary events at VW say more broadly about Germany?

A senior banker who is currently negotiating with VW says: "It is like the Stone Age again." A VW non-executive director says that running VW is "like trying to ride a chariot with four or five horses each pulling in a different direction".

Mr Piëch is a figure who fascinates and repulses like no other in corporate Germany. At VW he has helped set up what must be one of the most divided boards in the world, replete with so many rival factions and so much infighting that it makes German politics look positively boring.

Many have paid the price for underestimating him. Senior non-executive directors and close lieutenants of Bernd Pischetsrieder, VW's hapless head, were talking only days before his ousting of how Mr Piëch no longer seemed to be the power he once was.

How deluded they were. From his base outside Germany in baroque Salzburg, Mr Piëch was plotting the entire time. In spite of the strong performance of VW shares - up 75 per cent alone this year to an eight-year high - he believed Mr Pischetsrieder was jeopardising his family's legacy at VW. Nine years as chief executive, four as chairman and a €3.5 billion investment in VW by Porsche - where he is a large shareholder - were not enough. He wanted total control. "He just cannot leave this company alone," complains a senior non-executive.

So now, Mr Piëch has installed his closest manager, Martin Winterkorn, the head of Audi, as Mr Pischetsrieder's successor.

Mr Winterkorn is not known for diplomacy or good communication skills, but he has few critics, having turned Audi around, transforming it into a formidable competitor for BMW and Mercedes.

He is expected to bring the feuding VW and Audi brands closer together. But he is unlikely to make Mr Pischetsrieder's mistake and appear to act against Mr Piëch.

Therein lies the real problem: VW's mess today is largely due to unresolved issues Mr Piëch left when he stepped up to the chairman's job in 2002.

Few doubt that he saved VW in the 1990s when its very survival was at stake. But he later appeared to develop inflated notions of grandeur. One idea was that VW was no longer a mass-market manufacturer but should attack Mercedes. Luxury models were subsequently developed and expensive curios such as Bugatti and Lamborghini were bought.

On the surface of it, Mr Piëch left the company in good shape for Mr Pischetsrieder, with record profitability. But his most grievous error was setting up the so-called VW system, now simply called the Piëch system. This ensured that VW was run by a complex interplay of management, unions and local politicians. Unions became so powerful that instead of merely having seats on the company's supervisory board, they were called "co-managers".

When local politicians - who sat on the supervisory board - began criticising the system, he simply brought in Porsche to trump their influence. The system almost collapsed last year through a sex and bribery scandal that cost the jobs of senior union officials and a top manager close to Mr Piëch. The embattled Mr Pischetsrieder tried, but was powerless, to change the system. He paid the price this week when Mr Piëch, the unions and Porsche forced his resignation.

The question now for investors is whether the system makes VW ungovernable. Executives across Germany say VW is a unique horror in the economy. But the company's problems show how some elements of the broader German system, if taken to extremes, can also become dangerous.

Restructuring - as Mr Pischetsrieder found out - is extremely difficult because VW is such a symbol for the unions. Mr Piëch and Porsche say they want Mr Winterkorn to speed up the restructuring, but time - and diplomacy - for this task is essential. Co-management may be a distortion of the German tradition of co-determination, under which workers get seats on supervisory boards and a large say in the running of a company. But it underlines how a manager can use unions to prop up his power at shareholders' expense.

Mr Piëch's continuing influence also shows the dangers of chief executives moving upstairs to become chairmen. His close connection with Porsche also shows that the practice of using a relatively modest stake to control a company is alive and well.

It is too simplistic to damn the entire German system because of one company and one man. But VW serves as a timely warning about how a dynastic thirst for power can lead to damaging excess.