The Porsche and Piëch families are among the most influential entrepreneurs in Europe. They own car factories, restaurants and even a dairy. And they have the best connections to politics for more than 100 years. With the IPO, they got a little richer.
The old glory has returned. At VW in Wolfsburg, at Porsche in Stuttgart and above all at the Porsche and Piëch families in Zell am See, Austria, there is a glow that has not been seen for a long time since the death of the patriarch and last VW father Ferdinand Piëch. Because the Porsche and Piëch families have regained their power. A power that somehow slipped away when the diesel scandal and non-family managers threw the dynasty on ice – something unusual in Porsche’s more than 100-year history. But now everything is fine again.
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Who is in charge again in the group became clear in the most important decision of the year: the IPO of Porsche and the details of it. New VW boss and at the same time Porsche Colonel Oliver Blume officially had nothing to report. The man with the dual role is deep in a conflict of interest and needs to stay out of it. That can always happen in family businesses that have become a group, such as Volkswagen and Porsche. It’s a tradition that the group and its top manager follow the guidelines of the Porsche Piëch clan, put the interests of free shareholders aside and don’t care about adhering to values that are a matter of course for most German companies.
“Car, power, money – these are the ingredients for the history of the Porsche and Piëch families, all those descendants of the brilliant technician Ferdinand Porsche, who put the Beetle on the road on behalf of Adolf Hitler and laid the foundation for the VW Group this explosive mixture of family company and state capitalism,” writes journalist Georg Meck in his relevant work on the history of Porsche and VW and names the title of his book, which tries to explain the diesel scandal from these structures, after that: “Car makes money. The history of the Porsche and Piëch families.” The book is required reading for anyone who now buys a Porsche share and believes they are co-owners of the best sports car manufacturer in the world. Because the insight from this is that the shareholders are only part of a system that is designed to cement the power of the family. Until the last car is built. “It will be a sports car,” Ferdinand Piëch once predicted – which is how the story begins.
“No company drags around so many myths, no family is accompanied by so many legends,” says Meck. How does the family behind the global company tick, who are almost affectionately called “our oligarchs” in the Salzburg region, where they reside? Who are the shareholders actually dealing with now?
Meck went to Zell am See, visited the “Schüttgut”, a 600-year-old farm, romantically located on a slight hill southwest of Salzburg, “a main house with a wooden upper floor, plus two large farm buildings. In 1942, Beetle inventor Ferdinand Porsche bought the property, where the Porsches and Piëchs have “lived, loved and hunted” ever since. There is a small sign on the parking lot in front of the estate: “Porsche only” is on it and visitors are allowed to laugh. “Anyone who keeps the family tradition has land in the area as their first, second or third home,” writes the Porsche biographer. A regional dairy belongs to the family, the ships on the lake sail for them and so do the gondolas of the mountain railway. Of course, visitors can also dine with the family, for example in the well-known “Erlhof” by Hans Michael Piëch. This Porsche grandson is praised as the “reserved billionaire” in Salzburger Land, who does a lot that helps the region.
The ancestor of the family is described quite differently, the one who gave the name and first name: Ferdinand Porsche. Biographer Meck calls him “the devil’s designer”. Born in Bohemia in 1875 as the third of five children, he did an apprenticeship as a tinsmith in his father’s company. He was eleven years old when Gottfried Daimler invented the automobile and Carla Benz drove around in it. Meanwhile, Ferdinand is experimenting with electricity in the attic of his parents’ house – a tinkering that VW only remembers 130 years later and is now also pushing ahead with electrification.
But Ferdinand Porsche made it his first job, he went to Vienna to the United Electricity AG, which ultimately merged into today’s ABB Group. There he runs the test room for electric motors, marries colleague Aloisia Kaes in 1903, daughter Louise and son Ferdinand are born, his parents call him “Ferry”. Papa Ferdinand had already made his big appearance at the World Exhibition in Paris in 1900, where he and a partner presented an electric automobile: the Lohner-Porsche carriage with all-wheel drive, which became a hit in wealthy circles. The Rothschilds buy one, as do Thurn and Taxis. But Porsche parted ways with its business partner – or his. The reason: the technology-crazy design engineer uses up huge amounts of money that the commercial partner no longer wants to make available.
On April 25, 1931, Porsche founds its own company, the “Dr. Ing. hc. F. Porsche Limited Liability Company”, based in Stuttgart, where the minority shareholders are son-in-law Anton Piëch and racing driver legend Anton Rosenberger, a man of Jewish origin who left the company when the Nazis seized power. After the war, he was given 50,000 marks and a choice of a luxury Beetle or a Porsche sports car. In Stuttgart, Porsche received a memorable visit from a Soviet delegation, who invited him to Moscow on behalf of the ruler Josef Stalin. Stalin is looking for entrepreneurs who will help him to industrialize his huge empire. He noticed Porsche and made him an offer. Ferdinand Porsche goes there, listens to the matter – and declines. “After careful consideration,” son Ferry later describes the process, the father “decided against the golden cage.”
Porsche had gotten involved with other rulers who were closer to him. Ferdinand Porsche works on the “Strength through Joy” (KDF) car, which later became the Volkswagen. He introduced him to Hitler’s birthday in 1938. Since the outbreak of war, the Stuttgart design office has been working primarily on versions of this vehicle that can be used by the military. The “Kübelwagen” is one of these models. In 1939, Porsche was appointed military economics leader, chaired the “Panzer Commission” in the armaments council and, as one of Hitler’s favorite engineers, developed the “Ferdinand” tank destroyer, which was named after him. The company has long sidestepped this part of its history. Unlike the Volkswagen Group, which in 1996 had forced labor examined in a study spanning more than a thousand pages, Porsche preferred to let the subject lie dormant with the files.
There is quite a lot to be found there: a graphic shows 656 employees for 1944, including a number of forced labourers, as research by the journalist Ulrich Viehöver shows, who portrays Ferdinand Porsche as an “unconscionable profiteer of the Nazi regime” in his book about Nazi perpetrators in Stuttgart PS dynasty is part of the Nazi regime. Hitler appreciates the Austrian compatriot who comes from Bohemia. Heinrich Himmler gives him an SS rank. How closely linked the Porsche clan and the dictator clicque were? Historians judge: “In order to achieve his goals Porsche was always ready to use any means the Nazi regime offered him and to activate all personal contacts with Hitler and Himmler for the purpose of support.” With success: Porsches profits increased as a result of entering into armaments production “small design office” in Stuttgart from a good 3,000 Reichsmarks (1934) to over two million (1944).
The good relations in politics last beyond the war. Porsche and Volkswagen and the politicians in the states of Baden-Württemberg, Lower Saxony and the federal government usually play in a team. As Prime Minister of Lower Saxony, Gerhard Schröder sat on the Volkswagen Supervisory Board, the Prime Minister Stephan Weil (SPD), who is currently up for election, has the same role and is making sure that at least nothing damaging to the reputation of the Volkswagen and Porsche empire finds its way into the election campaign the Lower Saxony state politics. He has a powerful tool for this: Lower Saxony owns golden shares in Volkswagen – a model that dates back to the last century. It’s a thorn in the side of shareholders because it prevents any takeover against the will of the country, no matter how high its shareholding is. Politics and business use the services of the same people: Thomas Steg, deputy government spokesman under Schröder, became a lobbyist for VW after his term in office.
But all this is nothing compared to the influence of the family with its patriarchs, ancestors, grandchildren and great-granddaughters. At the top is currently Wolfgang Porsche, 76-year-old grandson of the founder of the dynasty, Ferdinand Porsche, and the big winner of a power struggle, at the end of which his cousin Ferdinand Piëch finally withdrew from the committees of the VW-Porsche Group. Wolfgang Porsche is the chairman of the supervisory board of the majority shareholder of Volkswagen, the family holding company Porsche SE. At the same time, he sits on the supervisory boards of Volkswagen and its subsidiaries Audi, as well as the sports car manufacturer Porsche. He is also the landlord at the Schüttgut in Zell am See.
Of course there are also black sheep or colorful dogs in the dynasty – depending on your point of view. Perhaps Daniell Porsche is best suited for this. In the fourth generation of the clan, he is the only child and thus heir to the largest share of the company. As a Waldorf teacher and music therapist, he positioned himself years ago as a critic and alternative to the strict “autocrat” Ferdinand Piëch. He is the author of many books, including “There is more to life than building cars”. Among other things, he invested his fortune in a holding company -Society that invests in sustainable and socially oriented companies. For a long time he was denied any influence in the group. Daniell Porsche is now also a member of several VW committees, including the supervisory board of Porsche SE.
You are all among the winners now. Because the IPO of Porsche has made them richer again. The price of the sports car manufacturer on the morning of the initial listing was 84 euros, and thus 1.50 euros above the issue price, which was already right at the top of the possible range. As a result, the Porsche clan’s favorite company was valued at 75 billion euros and had one of the largest IPOs that Europe has seen to date. Of the Porsche ordinary shares not offered to the public, 25 percent plus one share will go to Stuttgart-based Porsche Automobil Holding SE, which is controlled by the Porsche and Piech families. They pay for their quarter and ten billion euros and should have almost doubled their stake on the first day. Even the top employee of the Porsches, Oliver Blume, was allowed to attend the IPO in Frankfurt. Because one thing is clear: the story goes on and it never gets boring.
The article “Today, Porsche is a star on the stock market – it used to be a beneficiary of the Hitler regime” comes from WirtschaftsKurier.