Ferdinand Karl Piëch (; 17 April 1937 – 25 August 2019) was an Austrian business magnate, engineer, and executive who held the positions of chairman of the executive board (Vorstandsvorsitzender) of the Volkswagen Group from 1993 to 2002, and chairman of the supervisory board (Aufsichtsratsvorsitzender) from 2002 to 2015.
As a grandson of Ferdinand Porsche, Piëch began his career at Porsche before moving to Audi, where he was instrumental in transforming the brand into a formidable competitor to Mercedes-Benz and BMW, thanks to groundbreaking models like the Audi Quattro and the Audi 100. Trained as an engineer, Piëch had a profound impact on the design and engineering of several iconic vehicles, including the Porsche 911, Porsche 917, Audi Quattro, and most notably the Bugatti Veyron, which, as of 2012, held the title of the fastest, most powerful, and most expensive road-legal car ever produced. Due to his significant contributions to the automotive industry, Piëch was named "Car Executive of the Century" in 1999 and was inducted into the Automotive Hall of Fame in 2014.
Biography
Piëch was born in Vienna, Austria and was the third child of Viennese lawyer Anton Piëch and his wife Louise, who was the daughter of Ferdinand Porsche. His older brother Ernst Piëch (born 1929) is the son-in-law of Heinrich Nordhoff, the first CEO of Volkswagen. His sister Louise Piëch-Ahorner (1932–2006) worked in management at the Austrian general importer of VW/Porsche in Salzburg. His younger brother Hans-Michel Piëch (born 1942) is a lawyer in Vienna.
From 1952 to 1958, Ferdinand Piëch attended the Swiss boarding school Lyceum Alpinum Zuoz in the Engadine. He graduated in 1962 from ETH Zurich in Switzerland with a degree in mechanical engineering, having written a master's thesis on the development of a Formula One (F1) engine.
He began his career at Porsche in 1963 under his uncle Ferry Porsche. He headed the development department from 1965 and became the technical director in 1971. During this time, he led the development of the Volkswagen EA 266, which was the planned successor to the Volkswagen Beetle. Although the project was completed in 1971, high development costs and profitability concerns meant the vehicle never left the prototype stage, with all 48 prototypes destroyed soon after.
Piëch was involved in the development of the Porsche 906 and subsequent models, including the successful Porsche 917. Piëch departed from the company in 1972. He subsequently founded his own engineering firm in Stuttgart and assisted in developing the Mercedes-Benz OM617 engine.
In August 1972, he joined Audi in Ingolstadt, serving as head of the special projects department. By 1975, he had become manager of technological engineering, became deputy chairman of the board in 1983 and in 1988 became chairman of the board of management. Piëch was responsible for the design concepts behind many Audi models from the 1970s and 1980s, including the Audi 80, the Audi 100, the Audi V8 and launched the world's first petrol five-cylinder engine in the 1977 Audi 100 5E. He initiated the development of a car for the World Rally Championship, which led to the creation of the Audi Quattro with its four-wheel drive system. The TDI diesel engine was also developed under Piëch's leadership.
Time at Volkswagen In management
In 1993, Piëch moved to the parent company of Volkswagen AG, becoming the Chairman of the Board of Management, succeeding Carl Hahn. Volkswagen was on the brink of bankruptcy at that time, but Piëch played a central role in orchestrating a dramatic turnaround. He addressed three main areas: First, production and procurement were to be optimized. Second, no more compromises were to be made regarding quality, and third, he expanded the VW Group's product range into additional areas such as the premium segment and the truck business. Piëch was Chairman of the Board of Management of Volkswagen until 2002, and subsequently Chairman of the Supervisory Board until April 2015. In 2000, Piëch was appointed chairman of Scania AB.
Under Piëch's leadership, Volkswagen consolidated an array of mid-sized and premium vehicle brands such as Volkswagen, Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Škoda, SEAT, Scania, and MAN under the VW Group umbrella and arranged them into a hierarchical structure akin to that used by Alfred Sloan at General Motors. According to Piëch, this strategy aimed to enhance these brands' status and reputation by taking full advantage of Volkswagen's engineering, design expertise, and commitment to quality.
Production optimization, procurement In 1993, Piëch brought José Ignacio López and seven of his employees from General Motors to head the newly created board division for production optimization and procurement. López's negotiating tactics with suppliers, combined with the 28-hour workweek introduced by human resources director Peter Hartz, resulted in significantly reduced production costs at Volkswagen. Through extensive restructuring and rationalization measures to reduce costs, Piëch succeeded in bringing the Volkswagen Group back into profitability in the first few years.
North America Volkswagen's market share deteriorated in the late 1970s and throughout the 1980s due to intense competition from Japanese automakers, poor quality control and the negative response to the "Americanized" Volkswagen Rabbit produced by the Westmoreland assembly plant. The good reputation built up by the Beetle was quickly squandered, the multi-year lead over Japanese competitors was lost and after Volkswagen closed the Westmoreland factory, they contemplated leaving the North American market in the early 1990s.
Audi sales were also affected due to reports that the Audi 100 (sold as the 5000 in North America) was prone to unintended acceleration events, which led to hundreds of accidents and several deaths. A weak US Dollar also raised the prices of German cars.
Piëch's decision to manufacture the Volkswagen New Beetle and the introduction of the vastly improved Golf Mk4, Jetta Mk4 and Passat B5 models revitalized Volkswagen's presence in the American market after years of stagnation and successfully repositioned the division as a premium rival to mainstream Japanese and American competitors.
During Piëch's tenure as chairman, Volkswagen sales in the United States rose from less than 50,000 cars in 1993 to 355,648 cars in 2001. Audi also experienced significant sales growth after introducing the A4, the redesigned A6 and the TT. Audi sold 85,726 cars in the United States in 2002, compared to just 12,117 cars in 1991.
Quality
After taking office in 1993, Piëch made very few compromises regarding quality and was very interested in understanding the causes of manufacturing problems and eliminating them. For example, the B-pillar of the Golf Mk4 was reinforced and partially hand-manufactured to ensure it performed no worse than the Mercedes-Benz A-Class in side-impact tests. Because of his meticulous attention to detail regarding small gaps, which are only possible with high body rigidity and therefore represent a quality feature, he was nicknamed "Gap Ferdl."
In 2014, fellow automotive executive Bob Lutz recounted a conversation he had with Piëch at the Frankfurt Auto Show in the early 1990s, in which he remarked how he was impressed with the fit and finish and tight body tolerances on Volkswagen's new models. Piëch told Lutz that he achieved this by assembling Volkswagen's top body engineers in his office and telling them they would all be fired if all of Volkswagen's vehicles didn't have body tolerances of 3 millimeters within six weeks.
Additional business areas
During his tenure, Piëch made significant moves into acquiring high-end marques, securing Lamborghini for Audi and establishing Bugatti Automobiles SAS. His acquisition of Rolls-Royce and Bentley proved more contentious. While Volkswagen successfully obtained the Crewe factory, car designs, nameplates and trademarks such as the Spirit of Ecstasy and the Rolls-Royce grille shape, it was denied the use of the Rolls-Royce name and emblem, which BMW had licensed from Rolls-Royce Holdings.
After negotiations, VW sold the Spirit of Ecstasy and the Rolls-Royce grille trademarks to BMW, allowing BMW to launch Rolls-Royce Motor Cars. Although Piëch later claimed that his primary interest was in Bentley, as it sold better than Rolls-Royce by a ratio of two to one, many saw the loss of the Rolls-Royce brand as a significant failure.
In the commercial vehicle sector, Scania and MAN were acquired, as was the Italdesign Giugiaro design studio. Volkswagen acquired motorcycle manufacturer Ducati in 2012, marking Volkswagen's entry into the motorcycle market.
Piëch was also the driving force behind the Volkswagen Phaeton luxury saloon, which was designed to compete with other high-end luxury cars. The Phaeton was a commercial failure, particularly in North America where only 3,500 cars were sold from 2004 until it was discontinued in 2006.
Farewell to VW On 10 April 2015, he publicly stated that he was distancing himself from Martin Winterkorn, the CEO of Volkswagen AG and Porsche Automobil Holding SE. On 25 April 2015, Piëch resigned from all mandates within the Volkswagen Group with immediate effect because the Supervisory Board of Volkswagen AG no longer saw the mutual trust necessary for successful cooperation.
Criticism Problems within the VW Group
The Volkswagen Phaeton and the Bugatti Veyron, although they were successful at proving Volkswagen's technical capabilities, were developed at enormous expense and were consistent loss-leaders; Volkswagen lost an estimated $6 million on each Veyron that was sold and they also lost an estimated $40,000 on each Phaeton that was sold.
Personnel policy As CEO of Volkswagen AG, he was partly responsible for the dismissal of numerous senior management employees and a large number of board members, both at Volkswagen and especially at Audi. Examples:
Audi boss Franz-Josef Kortüm, who was dismissed after only 13 months in 1993 because Piëch was not satisfied with the sales figures. His successor, Herbert Demel, also had to vacate the position soon after repeated clashes with Piëch.
Demel's successor, Franz-Josef Paefgen. Piëch dismissed him in 2001; previously, he had accused him of stagnation at Audi.
The discussion surrounding the future of VW CEO Bernd Pischetsrieder in early 2006, who had once been groomed by Piëch as his successor, was also triggered by a statement from Piëch. In February 2006, Piëch publicly questioned the support for Pischetsrieder from the employee representatives on VW's supervisory board. Nevertheless, Pischetsrieder's contract was extended in May 2006. However, this did not prevent the supervisory board from removing Pischetsrieder from his position on the board effective 31 December 2006.
VW emissions scandal Piëch's role in the Volkswagen emissions scandal remains unclear, especially when he first learned of the allegations. Piëch claimed that he had informed members of the supervisory board, such as the Minister-President of Lower Saxony Stephan Weil and works council chairman Bernd Osterloh at an early stage about discrepancies in the software. In February 2017, he refused to testify before the Bundestag's investigative committee.
Engineering
At Porsche, Piëch initiated significant policy changes within the company. For instance, starting with the 1967 Porsche 907, the driver's position in two-seat sports car racers was shifted from the left to the right, as this provided an advantage on predominantly clockwise race tracks.