Martin Winterkorn will stay on as chief executive of Volkswagen in an unprecedented defeat in the carmaker's boardroom battle for its powerful chairman, Ferdinand Piech. David Pollard reports.
No car in sight - but this a man with a firm grip on the steering wheel. And this, the man who wanted him off the road altogether. Ferdinand Piech, VW's powerful chairman, has suffered an unprecedented defeat in his bid to unseat chief executive Martin Winterkorn. The VW executive committee voting not only to keep Winterkorn as boss - but also to propose extending his contract. Piech is the 78-year-old grandson of VW Beetle inventor Ferdinand Porsche. He has a history of ending careers of top executives with remarks planted in the media. This attempt an unedifying spectacle, according to CMC Market's Michael Hewson. SOUNDBITE: Michael Hewson, Chief Market Analyst, CMC Markets, saying (English): ''If you look at the performance of VW over the course of the last 12 months, certainly the car sales have been fairly good, and I'm struggling to understand the rationale of this particular intervention. Because there doesn't appear to be any reasons behind it. And I'm always a bit concerned when senior management at a company start to wash their dirty linen in public. And it does appear that the Chairman does seem very isolated in his criticism of the chief executive.'' Winterkorn has been seen as a possible successor to Piech. Despite his apparent triumph, it might not be a shoe-in. Frankfurt trader Arthur Brunner of ICF Kursmakler. SOUNDBITE) (German) TRADER FOR ICF KURSMAKLER, ARTHUR BRUNNER, SAYING: "Nobody knows whether he'll be that still in two or three years time. I believe it will not be easy for Mr Winterkorn to move to the top of the board of directors as he planned originally. Mr Piech has already slammed that door shut." Winterkorn is though able to claim a 64 per cent increase in sales in his time in office - VW the world's second biggest carmaker. His battle in the leadership struggle won with the help of a third man. Bernd Osterloh, the carmaker's powerful works council chairman, stuck by the CEO. An apparent 'thank you' for including labour representatives in the planning of vast cost cuts - and not excluding them. Shares rose over 2 percent on first release of the news.