Ferdinand Piëch obituary: The ruthless engineer who built Volkswagen

‘Since the 1960s, he shaped the development of the automobile like no other ...’

Piëch was at the heart of the German car industry for five decades. Photograph: Odd Andersen/AFP/Getty Images

Piëch was at the heart of the German car industry for five decades. Photograph: Odd Andersen/AFP/Getty Images

 

Ferdinand Piëch
Born: April 17th, 1937
Died: August 25th, 2019

Ferdinand Piëch, the gifted but ruthless engineer who transformed Volkswagen into both the world’s largest carmaker by sales and a company beset by scandals, has died aged 82.

Piëch, grandson of Beetle designer and founder of the eponymous sports carmaker Ferdinand Porsche, reunited VW and Porsche and made them part of a 12-brand empire that stretched from Lamborghini to Skoda.

Named car executive of the century in 1999, Piëch was at the heart of the German car industry for five decades, leading motor racing competition at Porsche in the 1960s, turning Audi into a true luxury competitor to Mercedes and BMW in the 1970s and 1980s, and reviving VW in the 1990s and 2000s.

But his cold manner and often cut-throat leadership style contributed, according to critics, to three major scandals at VW in the past 30 years, culminating in the company-threatening crisis in 2015 over diesel emissions. The German weekly Der Spiegel once described worklife at VW as “North Korea without the labour camps”.

Bob Lutz, former vice-chairman of General Motors, told the Financial Times that Piëch was “one of the greats in the automotive industry ... There’s no question Ferdinand was a brilliant person, a brilliant engineer, and a great leader.”

Allies said that helped form a personality that allowed few people to get close to him

He added: “I didn’t always agree with his dictatorial style of leadership, but he was certainly results-driven and accepted no excuses for failure.”

Piëch’s death was confirmed by his widow Ursula, who said he died “suddenly and unexpectedly”. German media reported he had collapsed at a restaurant.

“Ferdinand Piëch has written automotive history - as a manager, ingenious engineer and a visionary entrepreneur. Since the 1960s, he has shaped the development of the automobile like no other, pushing forward the entire industry and above all Volkswagen,” said Hans Dieter Pötsch, Piëch’s successor as chairman.

Richard A Johnston, in his 2005 book Six Men Who Built the Modern Auto Industry, said Piëch “more than any single individual, promoted and maintained Europe’s technical advantage over the rest of the automotive world in the second half of the 20th century”.

Piëch was born in 1937 in Vienna with “petrol in his blood”, as he wrote in his memoir, appropriately called Auto Biographie. His mother Louise was the daughter of Ferdinand Porsche, who designed the Beetle at the behest of Hitler, while his father Anton Piëch ran the main VW factory for the Nazis for most of the second world war.

After his father died when Piëch was just 15, he was sent to Swiss boarding school by his notoriously tough mother. Allies said that helped form a personality that allowed few people to get close to him.

He dreamt from an early age of becoming an engineer, and after earning a degree at a respected technology college in Zurich, Piëch went to work at the sports car maker his grandfather had recently started. He became responsible for its motorsport division in the 1960s, and built his reputation by setting out to dominate the Le Mans 24-hour race.

Against the recommendation of Porsche’s board, he invested massively to build the 917, which became one of the most successful racing cars in history, winning two Le Mans races that transformed the company, but in the process nearly bankrupted it.

In 1972, he moved to Audi where, as head of technical development, he launched the Quattro and engineered a series of innovations that turned a lacklustre brand into a viable competitor to the two leading luxury brands of BMW and Mercedes.

He cemented his power in 2002 by becoming chairman, but concerns grew about his brutal management style

After rising to serve as Audi’s chief executive, he took the same job at parent company VW in 1993. He saved the company from financial oblivion and launched an empire-building spending spree that led to the purchases of expensive luxury brands such as Bugatti, Bentley and Lamborghini as well as truckmakers Scania and MAN, and motorcycle brand Ducati. But he was also known for pricey follies such as a failed attempt to compete with Mercedes through the VW Phaeton and the development of the world’s fastest but loss-making car, the Bugatti Veyron.

He cemented his power in 2002 by becoming chairman, but concerns grew about his brutal management style, his interest in technical excellence over profitability and his disregard for corporate governance standards.

He had a habit of defenestrating rivals and executives that displeased him by using a few choice words to the media, most famously in 2006 when he undermined his successor as chief executive, Bernd Pischetsrieder, by saying that an extension of his contract was “on open issue”. Months later, he was dismissed. “It is not possible to bring a company to the summit while maintaining harmony,” Piëch once said. “VW, family, money” was his way of listing his priorities.

The dismissal of Mr Pischetsrieder led to discussions between VW’s then largest shareholder, the state of Lower Saxony where many of its factories are located, and Anglo-American investors about ousting Piëch. But the wily Austrian outmanoeuvred them all, and soon had the chance to show his disdain for corporate governance norms.

In 2012, he nominated his wife Ursula, the family’s former nanny and 19 years his junior, to VW’s supervisory board. “Kindergarten teacher with additional qualifications in business and law (not currently working)” was how VW described her qualities in a letter to shareholders.

By then, Piëch’s control over VW seemed almost total as his extended family had become the carmaker’s biggest shareholders after a complicated deal in which it also bought Porsche.

Still, his tenure at VW was partly overshadowed by a series of scandals that both insiders and outside critics blamed on the system Piëch developed in which he managed the company closely with workers. In 1993, he poached a top executive from GM, leading to a torrent of insults and lawsuits over alleged corporate espionage. A second scandal, this time involving bribery and VW allegedly paying for prostitutes and even Viagra for workers, broke out in 2005. Piëch admitted there had been “irregularities” but said he had no knowledge of them.

Most seriously of all came the diesel emissions scandal in 2015, only a few months after Piëch had been ousted as chairman following a boardroom struggle with his one-time acolyte and then chief executive Martin Winterkorn.

Many blamed Piëch’s domineering management style for creating an atmosphere in which the cheating could flourish. Mr Lutz recalled once complimenting Piëch on the finish of the new VW Golf, particularly how small the gaps were between the doors and the frame.

It had prompted some people to speculate whether he deliberately masterminded his own demise

Piëch’s response stunned Lutz. He said he had cobbled together all his body engineers and manufacturing team in one room and said: “In six weeks I want 3-4mm gaps on everything. If I don’t have it, everyone in this room will be fired.”

It has never been fully explained what happened between Piëch and Mr Winterkorn that led to the chairman’s abrupt departure from VW in 2015 just before the scandal. The paranoia at the time in Wolfsburg, home to VW’s headquarters, was that Piëch had leaked the scandal to bring down his adversary.

Months after the scandal broke, leaked testimony caused uproar in Germany when it emerged that Piëch had told prosecutors that certain VW board members had early knowledge of the cheating. No evidence was produced to back the claims, which were never stated directly. However, it had prompted some people who have worked with the Machiavellian character to speculate whether he deliberately masterminded his own demise before the scandal went public - in effect playing the role of a captain who renounces control of the ship, and letting his first mate go down with the sinking vessel.

Piëch himself remained publicly silent about the episode and much else in the years afterwards. In April 2017, he ended up selling his 14.7 per cent stake in Porsche SE, the family-owned parent company that owns a controlling stake in VW. His last public appearance was the following month, when he attended Porsche’s annual shareholders meeting, sitting silently after arriving in a sky blue Porsche Panamera driven by Ursula.

His health had been in decline for some time, though he denied it. When rumours emerged in 2013 that Piëch might step down for health reasons, he demanded to know who started the rumours and infamously responded at the Frankfurt motor show: “First, I must be sure who it is. Then I will send him to the guillotine.”

He was vague about his private life and according to various interviews had 12 or 13 children with three, four or more women. Ursula told the DPA: “Ferdinand Piëch’s life was marked by his passion for the automobile and for the workers who built them. He was an enthusiastic engineer and car lover until the end.” – Copyright The Financial Times Limited 2019