Ferdinand Piech, the former chief executive and chairman of Volkswagen, has died. He was 82.
Piech was a member of the Porsche-Piech family, arguably the most powerful and influential automobile dynasty of them all. He was the grandson of Ferdinand Porsche, the founder of the Porsche car company and the designer of the VW Bettle.
Piech’s legacy was perhaps just as great as his grandfather’s, having turned around the fortunes of the VW Group and driven many of the technological and business advances that underpin the Wolfsburg-based car company’s success today. Today’s obituaries rightfully celebrate Piech’s extraordinary engineering and business acumen. But Piech was also a family business icon. And here are five reasons why.
Third generation visionary
Piech was a member of the third generation of the Porsche-Piech family. In family business lore, being a member of the third generation made him vulnerable to failure – the so-called “from short-sleeves to short-sleeves in three generations” syndrome. Instead, Piech reinvigorated not only VW, but along the way carmaker Audi, now a big part of the VW empire, as well.
He turned around the fortunes of VW, which was close to bankruptcy when he took over as CEO in 1993. He might have believed it was his entitlement to run the business his grandfather had founded, but Piech didn’t let that get in the way of his success. He ensured success through his brilliant engineering skills and dedicated hard work. Piech was an exemplar of what a third-generation member of a family business dynasty can achieve, rather than what conventional wisdom might expect of what a third-generation heir might not achieve.
When a family business gets into third or more generations of ownership, there is almost inevitably going to be different family allegiances – particularly when the company is worth billions of dollars. And so it was to be with the Porsche-Piech clan.
Piech had a long rivalry with his cousin, Wolfgang Porsche – well documented in a German TV documentary called “Germany’s Biggest Clans – The VW Story”. Much of that rivalry came from Piech not bearing the Porsche name, whose nomenclature was seen by many members of the family as the true and rightful owners of the Porsche-VW business. That may have been the case, but Piech prevailed as the alpha male among the third generation of the extended family and that helped him drive success at VW.
Neither did Piech always get on well with the non-family top executives at VW – he sacked many of them and he pushed aside his successor Bernd Pischetsrieder. But ultimately he met his match with Pischetsrieder’s successor, Martin Winterkorn, who ousted Piech from the board of VW. Ironically, that helped Piech to distance himself from the Volkswagen emissions scandal – he was no longer a board member when the so-called scandal Diesalgate blowup. Winterkorn wasn’t so lucky.
Cut out the word family from “family business” and what’s left is business. Piech new this and he excelled in the world of business. At Audi, he turned around a tired brand in the early 1970s into one which today competes well against all the top marques. He linked Porsche to successes in motorsport and introduced the four-wheel-drive Audi Quattro in 1980s, which so many other brands have since adopted.
But ultimately his greatest business achievement was driving the success of VW, to ultimately become Europe’s biggest carmaker in terms of cars produced, and its most profitable. As many have said about Piech, the term “Vorsprung Durch Technik” (progress through technology) was the personification of his business success. He believed excellence in technology could drive a business forward, and to a great extent, he was proven right.
Stakeholder values – perhaps the most classic tenant of all family business attributes – might not have been uppermost in the mind of Piech when he was plying his trade. That said, he did realise the importance of a motivated workforce and was considered by most of the workers at VW’s main plant in Wolfsburg as popular. VW general works council chairman Bernd Osterloh said upon Piech’s death that he was a “great manager and engineer”, adding: “without Ferdinand Piech, Volkswagen would not be where we are today, and we owe him our thanks and appreciation.” Similar praise was bestowed upon Piech by senior political figures of the German state of Lower Saxony, where Wolfsburg is located. Two big stakeholders – workers and the community – liked Piech, if, indeed, others like some family members and non-family managers were less keen.
Within the context of a family business, the death of one of its greatest members is probably best-appreciated by the legacy that person leaves to the next generation. Piech had plenty of children – 12 (some reports say 13), so his legacy towards his immediate family will be deeply felt across many people. One of those children, Anton Piech, is already carrying that legacy very much forward with the established of Piëch Automotive, a maker of high-end electric cars. And no doubt many of his other offspring will carry his legacy forward in different ways for many years ahead. Within the broader context of VW and the automobile sector, his legacy will be remembered as one of the greats of the industry, perhaps even up there with Henry Ford and his grandfather, Ferdinand Porsche.