Volkswagen CEO and chairman of the board of management Martin Winterkorn has won the approval of the German auto giant’s supervisory board executive committee and will now likely have his contract extended, despite recent grievances made by chairman Ferdinand Piech. In an interview last week with Germany’s Der Spiegel, Piech said that there was “distance” between him and Winterkorn, leading to speculation that the VW CEO’s time may be up.
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A special meeting between senior VW shareholders and labor representatives was held yesterday to discuss the matter, with the outcome revealed in a statement released by VW today:
“The executive committee of the supervisory board of Volkswagen AG states that Prof. Dr. Martin Winterkorn is the best possible chairman of the board of management for Volkswagen.
“The executive committee places great importance on the fact that Prof. Dr. Winterkorn will pursue his role as chairman of the board of management with the same vigour and success as before, and that he has the full support of the committee in doing so.
"The executive committee will now propose to the supervisory board to extend Prof. Dr. Winterkorn's current contract in the supervisory board meeting of February 2016.”
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So what was all the fuss about? Piech has a lot of sway at the automaker and is known for having senior staff dismissed quickly when displeased with their performance, though despite his family’s shareholdings he would have needed more votes to have Winterkorn fired. At 78 years of age, he’s also due to retire soon, most likely in 2017, and is thought to be seeking a replacement, someone he’s previously said will need to “be an engineer”.
Winterkorn’s background is in engineering but it’s believed Piech is displeased with the VW CEO’s recent performance and lack of vision, especially when it comes to hybrids and electric cars. Though VW is vying with Toyota to be the world’s biggest automaker, it’s also failed to make serious headway in the lucrative U.S. market with its VW brand, and its return on sales has dropped to just 2.2 percent from an impressive 6 percent in 2002, when Piëch was CEO. Winterkorn became CEO in 2007, and it now looks like his contract will be extended beyond 2016.