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Porsche slams government bailout for auto industry

 
5 3,301 views Oct 16, 2008

Wiedeking is critical of using taxpayer funding to support inefficient private companies

Wiedeking is critical of using taxpayer funding to support inefficient private companies

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Porsche is expected to release another set of high profit figures for this financial year on the back of its growing stake in VW and its own successful sports car range, but despite this success the carmaker is critical of the poor performance of some of its rivals and the U.S. government bailout.

Porsche experienced a year of record profit last year, earning a profit of €4.24 after tax. Sales also reached record levels, earning the company revenues of €7.4 billion. These figures are expected to be improved upon this year, according to Porsche CEO Wendelin Wiedeking.

In a speech in the city of Frankfurt, Wiedeking affirmed that Porsche is better than it has ever been and that shareholders will be "rejoicing" at the coming financial results, reports Auto Motor und Sport. He also criticized the way the current global financial crisis is being handled, especially by the auto industry.

Citing the lack of responsibility shown by many companies, Wiedeking slammed auto companies for having previously operated for their own private profit but then wanting to socialize their losses. Wiedeking was also vocal about the use of taxpayer money in bailing out inefficient private companies, referring to both the U.S. bailout and the recent request from European carmakers for a similar aid package.

The future is looking very bright for Porsche. The company plans to expand its stake in VW group from the current 35% to a controlling 50% by the end of next month, and its upcoming Panamera sedan is expected to be one of the most profitable models in its portfolio.



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Comments (5)

  1. ma_www.mywheelsonwalls.com avatar www.mywheelsonwalls.com Posted: 10/16/2008 1:06am PDT

    This is where Porsche rubs me the wrong way! First off, something is only profitable if it sells! Second, as recently as the early nineties Porsche's idea of quality was to just get the cars built. Then we'll pay a bunch of money to guy's in white coats to run around and fix what was missed on the production line. This mentality drove them to near failure and the Japanese wiped their ass with Supra's, 300 Z's and RX7's.

    Did they rescue themselve's? Nope, they hired consultants from Toyota to teach them how to make cars with that now tried and true process of JIT manufacturing.

    Typical Germans running around pointing fingers with no credit given!!!

    Yes the U.S. auto industry has made a mojor mistake that could cost it and the country big time. Yet I pose one question. Which U.S. manufacturer has been winning its class at LeMans lately? ____________ Not a bad achievement considering the production version is a bit of plastic running around on leaf springs!!!
     
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  2. ma_InkMaster avatar InkMaster Posted: 10/16/2008 1:08am PDT

    I agree 100%. I think its stupid for the government to bailout every company which screwed up. It would be one thing if it would be some sort of instant crisis where the companies would have no time to prepare, but this, the shit they're in now, its been perfectly clear to everyone, for years now, where everything was headed. And while the facts were right there the automotive companies continued doing the same stupid crap they've been doing year after year even though they perfectly understood that it would land them knee deep in crap a few years down the road.

    Again, I support Porsche in this 100% - no reason that idiots should be bailed out while those who did everything accordingly and came out on top get nothing.
     
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  3. ma_www.mywheelsonwalls.com avatar www.mywheelsonwalls.com Posted: 10/16/2008 1:46am PDT

    InkMaster- As much as government bailouts go against having a free market in this case its the only way out!

    Why? Simple really! Car companies dont make the whole car they engineer hundreds of parts from hundreds of suppliers to work together as one. If the U.S auto industry was to go out of busuness it would be chopping the head off the dog and then we'd be in some serious "shit", as you put it. The unemployment rate globally would be huge from the car company to coffee shops. For example: something as simple as sun visors are pretty much made/engineered by one company out of Texas for pretty much everyone who makes a car/truck.

    There was once upon a time a car company that did make the majority of its parts and that was TVR. Where are they now? Bankrupt and owned by a holding company out of Florida.

    Unfortunately this is a necessary evil and to hear Obama the other night say wealth does not trickle down is scary. Coffee shop owners have the opportunity (not that they all do) to go make millions selling coffee to "Joe Blue Collar" as he/she heads off to work at a GM/Ford/Chrysler plant.
     
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  4. ma_SuperSkyline89 avatar SuperSkyline89 Posted: 10/16/2008 6:18am PDT

    I agree with Porsche, but only in principle, it's sad that taxpayers have to bail out a company that can't build products that people want.

    BUT, if the American auto industry goes under, hundreds of towns and small cities will be devastated. Like the GM Truck Plant in Oshawa, that's causing the loss of thousands of jobs that have nothing to do with cars, restaurants and stores going under because there's no more workers to sell things to. I just hope that GM, Ford, and Chrysler get the message that they need to change things severely if they want to survive. Meanwhile, I think that our governments (America and Canada) should give incentives to foreign makers to set up shop in our countries. Jobs are jobs, it doesn't matter who is supplying them. Relying on the Americans to give everyone a job is just stupid, no matter what they're going to have to close several factories.

    And as far as Porsche hiring the Japanese. Sure they got outside help, but it wasn't taxpayer money, so it's really not the same thing.
     
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  5. ma_InkMaster avatar InkMaster Posted: 10/16/2008 11:57am PDT

    MWOW, I perfectly understand that alot of people would lose their jobs over this etc etc - I know all that. All I'm saying is that generally speaking its a stupid policy bailing out those companies who knowingly screwed up and instead of fixing their problems before they turned into "serious shit" they just continued doing what they were doing year after year.

    So now the companies which did the wrong thing are getting money while the companies which understood where the market was going and acted accordingly get nothing.
     
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