The family calls the shots at VW

When the cornerstone of the original Volkswagen factory was laid in Wolfsburg in 1938, at a time when German nationalism was swelling, a man named Ferdinand Porsche had already begun fashioning big - yet small - plans. "At this very site, according to the will of the Führer," said a Nazi official at that ceremony in 1938, "a gigantic factory is to be erected that one day the entire world will talk about."

Amidst the megalomania of the times, Porsche himself had become engrossed in the design of a small, inexpensive car, a "vehicle for the people," that would one day vault him - and his family - to the top of the automobile industry. Today, following decades of metamorphosis and aggrandizement, the Volkswagen enterprise now comprises 600,000 workers worldwide who produce over 10 million cars per year, and the reins of the company still remain in the hands of the family.

Who owns whom?

Porsche's grandson Ferdinand Piëch (picture above on left) is the current chairman of the VW supervisory board, the man who holds those reins, and he is at the center of a crisis of leadership that came to the fore, unexpectedly, this past Friday.

With one sentence, Piëch, 77, shattered the widespread certainty that Martin Winterkorn (pictured above on right), CEO of Volkswagen for over eight years now, would eventually take over for him as the head of the supervisory board. "I'm distancing myself from Winterkorn," Piëch said on Friday, causing shockwaves that would extend well beyond the VW world. The greater auto industry was confounded: Weren't Piëch and his protégé Winterkorn known the formidable duo? Wasn't Winterkorn his clear heir-apparent? What happened behind the scenes that led to the "distancing" of which Piëch spoke? Was it personal? Or was it merely cold-blooded business?

"The statement made by [Piëch] represents his personal opinion, and it has not been agreed upon by the family," Wolfgang Porsche, chairman of Porsche Holding SE, which incidentally holds a majority stake in VW, said in response to his cousin's unanticipated remark.

To get a sense of the intermingled complexity of how VW is owned and controlled, and the role that the Piëch and Porsche families - or clans as they've been dubbed - play therein, one must perhaps look back a few years.

In 2009, one of the most spectacular mergers in the history of the automobile industry took place, and it concerned - you guessed it - the Porsche and VW groups. Back then, Porsche, under the direction of CEO Wendelin Wiedeking, attempted to take over VW. The ambitious move failed, and it resulted in Porsche being swallowed by VW. It was the end of an era for Porsche, the end of its autonomy, the end of Wiedeking.

And it was a clear victory for the Piëch family; however, it wasn't exactly the end of the Porsche family, or its influence at VW. After the merger, Wolfgang Porsche held onto his seat on the VW supervisory board and his chairmanship of Porsche Holding SE, which, again, is the majority stakeholder of VW.

Die Familie

Although it seems impossible on the surface to draw parallels between the hoopla of 2009 and now, the two instances aren't perhaps fundamentally different, when it comes to the overarching structure of VW leadership.

When Piëch announced his "distance" to Winterkorn on Friday, despite the latter's tested mettle as a manager, it became clear for observers that he was, in the end, a mere employee at VW - and not a part of the family. Wiedeking, too, wasn't part of the family.

All that remains now for Ferdinand Piëch is to explain his plans to the six select members of the VW supervisory board, the steering committee of which he is the chairman. Those plans will have to be finalized by May 5 at the latest, when Winterkorn and Piëch will stand together before the VW annual shareholders' assembly. There's no doubt they'll both have their lines rehearsed, but it will be clear - even for those outside the inner VW circle - who's acting and who's directing.