Ferdinand Piech: Executive who made VW Europe’s biggest carmaker

His vision and aggressive leadership style turned the fortunes of the company around

Piech won praise for steering Volkswagen out of a financial ditch (Getty)

Ferdinand Piech was the hard-charging Volkswagen executive who transformed the company into Europe’s largest carmaker, overcoming scandals and dispatching business executives with a ruthless management style.

As the grandson of Ferdinand Porsche, the Austrian-born Piech, who has died aged 82, was a member of one of Europe’s most prominent automotive families. In the 1930s, his grandfather founded the Porsche auto company and designed, at the request of Adolf Hitler, the beetle-shaped “people’s car” – or Volkswagen – for ordinary citizens.

A brilliant engineer in his own right, Piech had a leading role in the 1960s in developing the Porsche 911 sports car and the Porsche 917, a race car that could reach a top speed of 240mph.

Ferdinand Porsche’s first Beetles came off the assembly line in 1938 and, during the Second World War, Volkswagen was a major producer of military vehicles, aircraft engines and other equipment for the German war effort. Piech’s father was chief executive of Volkswagen during the war and was a member of the Nazi party.

After designing sports cars, the younger Piech had hoped to become the top executive of the family-run Porsche business in Germany. He had to shelve that ambition, however, when his mother and uncle – Ferdinand Porsche’s children – grew weary of family disputes and ruled that none of Porsche’s descendants could hold a management position with the company.

Piech then moved to Audi, a German automaker that was a Volkswagen subsidiary. Here he helped develop a five-cylinder engine and a four-wheel-drive system that helped to burnish the image of the once-dowdy brand. He moved up in the company hierarchy and by the time he became board chair in 1988, Audi was a credible rival of Germany’s two top luxury carmakers, BMW and Mercedes-Benz.

Meanwhile, Audi’s parent company, Volkswagen, was falling further behind its competitors. It faced an estimated loss of $1bn (£814m) in 1992, and there was talk of closing its dealerships in North America. Piech joined the supervisory board and was soon named chief executive of the struggling company. He already had a reputation as an imperious leader who fired executives who didn’t meet his expectations.

“Only when a company is in severe difficulty does it let in someone like me,” Piech wrote in his autobiography. “In normal, calm times, I never would have gotten a chance.”

Piech ousted several members of the board to consolidate control, eliminated layers of executives and demanded design changes from the engineering department. In one meeting, he said he wanted the gap between the car door and the body frame reduced within six weeks. “If I don’t have it,” he said, “everyone in this room will be fired.”

In 1998 he reintroduced his grandfather’s Beetle, which had long gone out of production. Once the low-powered utilitarian vehicle of the hippie generation, the new Beetle had the familiar bubble-top design but a livelier engine. An innovative advertising campaign played off its earlier image with the slogan “Less Flower. More Power”.

Piech bought several other carmakers, including Italy’s Lamborghini and Bugatti, Britain’s Bentley and the Czech brand Skoda. He engineered concessions from Germany’s powerful labour unions, reducing the workweek to four days while saving most workers’ jobs.

He also introduced the idea of building different car models – from Audi to Volkswagen and other subsidiaries – on the same “platform”, or the same design blueprint. In other words, different car models would share the same chassis, wheel-well design and hardware. This efficiency move reduced Volkswagen’s basic design “platforms” from 19 to four, while the company produced millions of cars a year.

Piech won praise for steering Volkswagen out of a financial ditch. Under his leadership, VW sales rose dramatically around the world. In 1993, the year he became chief executive, only 62,000 Volkswagens were sold in the US. Nine years later, the figure was more than 355,000. A company that was $1bn in the red in the early 1990s had annual profits of more than $3bn (£2.4bn) a decade after Piech took over. VW became Europe’s largest carmaker and challenged Toyota for the top position in the world.

Ferdinand Karl Piech was born in 1937 in Vienna and grew up on a family estate in southwestern Austria. As a child, he visited Volkswagen factories, seemingly unaware that much of the work was being performed by slave labourers. When a book appeared in 1996 describing Volkswagen’s part in the Nazi war effort, Piech was upset and noted that the company had paid millions of dollars in reparations.

Piech attended boarding school in Switzerland and graduated in 1962 from the Swiss Federal Institute of Technology in Zurich.

Piech stepped down as chief executive of Volkswagen in 2002 but stayed on as a powerful chair of the board for more than a decade. In the mid-2000s, when the Porsche company, owned by his family, made a bid to take over Volkswagen, Piech fought the effort. By 2009, he turned the tables and bought Porsche, placing his family’s greatest jewel under Volkswagen’s corporate umbrella.

He was finally forced out of Volkswagen’s leadership in April 2015, months before a scandal broke involving the fraudulent manipulation of emissions figures. Observers charged that his autocratic style led to a management style of concealment, although he escaped direct responsibility. The fallout left the carmaker facing about $30bn (£24.4bn) in fines.

In 2017 Piech sold his billion-dollar stake in Volkswagen to members of his family, giving effective control of both VW and Porsche to his grandfather’s descendants. When asked to name the most important things in his life, he listed, in order: “VW, family, money.”

He was married three times and was the father of at least 12 children.

Ferdinand Piech, car executive, born 17 April 1937, died 25 August 2019

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