Change in Top Management: Michael Macht Appointed Board Member Production of VW Group

Matthias Müller New Chairman of the Porsche AG Board of Management

Editors Note: Every successful corporation has a common trait. That trait being the premise that “good things start at the top”. Here at PML we’ve been watching the whole VW- Porsche Merger & Acquisition scenario unfold.  We like what we see – so far. The VW Management Team brings a whole new perspective to the long-term outlook at Porsche.  Judging from VW’s success in the global marketplace, Porsche is in a position to become an even stronger, more robust brand that will continue to build interesting products. The Porsche enthusiast community can argue back and forth on the merits (or lack of) of the VW Merger & Acquisition until everyone’s blue in the face…but the bottom line is this: The merger was the best move given the circumstances surrounding Porsche.  We look forward to their continued success.

Stuttgart. Taking effect on 1. October 2010, the Supervisory Board of Dr. Ing. h.c. F. Porsche AG, Stuttgart, has appointed Matthias Müller (57) the new Chairman of the Board of Management of the world-famous manufacturer of premium sporting cars. Müller, moving from Volkswagen AG, Wolfsburg, to the Top Management of Porsche AG, is following in the footsteps of Michael Macht (49) appointed a Member of the Group Board Management of Volkswagen AG by the Supervisory Board. In future Macht will be responsible for the Production Division and, as a result, the control and coordination of all plants within the Volkswagen Group.

Matthias Muller

Previously in charge of Product Planning, Product Management and Model Series for the VW Group and the Volkswagen Brand, Matthias Müller has successfully promoted the development of Product Lines in the last three years within the VW Group. “Matthias Müller gives us the exceptional competence of an outstanding product expert benefiting the interaction of independent brands within an Integrated Automotive Group leading the market worldwide. Contributing this knowledge, he guarantees that Porsche, as a world brand, will not only maintain, but further expand its top position”, states Dr. Wolfgang Porsche, Chairman of the Supervisory Board of Porsche AG, on the appointment of Müller, who hails from the town of Chemnitz in Eastern Germany.

Dr. Porsche also expresses great praise for the outstanding services of the former Chairman of the Board of Management: “Michael Macht took over the leadership of Porsche AG in a period crucial to the Company. Through his skill and many years of experience within the Porsche Group, he has succeeded in restabilising the Company within a short time, placing our operations on a strong and solid foundation. Concluding the Fundamental Agreement between Porsche Automobil Holding SE and Volkswagen AG, Michael Macht has played a significant role in setting out the ongoing schedule for our fully Integrated Automotive Group.”

The Chairman of Porsche AG’s Group Works Council, Uwe Hück, also congratulated the former Chairman of the Board of Management: “I wish Michael Macht all the very best and lots of success in his new position on Volkswagen’s Group Board. I know that in future the people at Porsche will remain close to him and that he will continue to work all-out to use the full capacity of our plants in Zuffenhausen and Leipzig to the benefit of the Company.

Hück also bid a warm welcome to the new Chairman of the Board of Management of Porsche AG: “From numerous talks with Matthias Müller I know that he will maintain Porsche’s unique and independent position also in future. Precisely this makes him the right man for us representatives of the workforce, which is why we give him our full support. We already see him today as a genuine “Porsche man” enabling us to really push down the throttle at all our plants. I am confident that the workforce will work well and successfully with Matthias Müller to the benefit of the Porsche Company as a whole.”

620 Highly Efficient Turbo-Horsepower: Most Powerful Street-Legal Porsche of all Times

Stuttgart. The time: seven minutes, 18 seconds on the Nürburgring-Nordschleife. The power: 620 hp. The weight: 1,370 kilograms or 3,021 lb in road trim with all fluids on board. The car: the new Porsche 911 GT2 RS. The GT2 RS is making its world debut at the Moscow Auto Show on August 25th.

The future top GT model marking the absolute climax in the 911 range is the fastest and most powerful road-going sports car ever built in the history of Dr. Ing. h.c. F. Porsche AG, Stuttgart. With power up by 90 hp and weight down by 70 kilograms or 154 lb in comparison with the 911 GT2, the new 911 GT2 RS has a power-to-weight ratio of just 2.21 kilos or 4.9 lb per horsepower, by far the best power/weight ratio in its class. Obviously, these are the ideal ingredients for an ultra-high-performance sports car with supreme agility, truly blistering performance on the road, and of course exemplary Porsche Intelligent Performance. For despite this extra power and performance, fuel consumption and CO2 emissions versus the 911 GT2 are down by approximately 5 per cent to 11.9 ltr/100 km (equal to 23.7 mpg imp) and 284 g/km.

The 3.6 litre six-cylinder boxer engine boosted by two turbochargers with variable turbine geometry exclusive to Porsche in its combination with a gasoline engine drives the rear wheels via a six-speed manual gearbox. Developed especially for the 911 GT2 RS, sports tyres measuring 325/30 ZR 19 convert this massive power into equally massive performance and acceleration on the road: 0 to 100 km/h in 3.5 seconds, 0 to 200 km/h in just 9.8 seconds, and 0 to 300 km/h in 28.9 seconds. Top speed is 330 km/h.

Equally supreme stopping power on this ultra-high-performance sports car comes from PCCB composite ceramic brakes. Appropriate longitudinal and crosswise dynamics are ensured by the sporting RS set-up of the springs, PASM Porsche Adaptive Suspension Management, anti-roll bars, as well as the dynamic engine mounts and PSM Porsche Stability Management.

In its looks the new 911 GT2 RS stands out clearly from the 911 GT2 above all through the lavish use of carbon-fibre-reinforced (CFR) components in matt-black surface finish, even wider wheels and flared wheel arches at the front, new 911 GT2 light-alloy wheels with central locking, as well as ”GT2 RS“ model designations on the doors and rear lid. The upgraded front spoiler lip and the rear spoiler lip made of CFR and now 10 millimetres or almost 0.4 inches higher, again in surface carbon finish, ensure the right aerodynamic precision as well as extra downforce.

The interior also exudes the flair of sporting performance in virtually every detail, featuring lightweight bucket seats made of carbon-fibre-reinforced plastic in carbon surface finish and lightweight door panels with door opening straps. The basic interior colour is black, contrasting attractively with features such as the seat centre sections and the roof lining as well as segments on the steering wheel rim. The gearshift and handbrake lever are both finished in red alcantara.

Limited to just 500 units, the 911 GT2 RS will be available in Europe from September 2010, in the USA from October 2010. The Euro base price is 199,500.- Euro. Including VAT and national specifications/equipment the new 911 GT2 RS will retail in Germany at a price of 237,578 Euro.

Securities Fraud and Manipulation Lawsuit against Porsche SE expands to more than $2 Billion in Losses

18 Investment Funds join litigation, amended complaint filed

NEW YORK, /PRNewswire/ — On 29 April eighteen investment funds joined the lawsuit against Porsche Automobil Holding SE (”Porsche SE”) and two of its former executives, Wendelin Wiedeking and Holger Haerter, asserting fraud and securities manipulation in relation to Porsche SE’s failed 2008 attempt to take over Volkswagen AG (”VW”). With the addition of the new plaintiffs, the funds — now 35 in number — seek to recover more than $2 billion dollars in losses suffered after Porsche SE triggered what The New York Times called “a short squeeze of historic proportions.”

The Amended Complaint, filed the morning of April 29th in Manhattan federal court, explains in greater detail how Porsche SE manipulated the price of VW stock as it secretly cornered the market in VW shares. According to the Amended Complaint, Porsche SE hid that it was cornering the market in VW’s freely traded shares by repeatedly issuing misleading statements about its activities and by spreading purchases of call options around to several counterparties to avoid detection of its increasing control. The scheme induced the plaintiff funds to establish short positions on VW stock. When Porsche SE suddenly revealed the extent of its true control of VW shares on October 26, 2008, a massive short squeeze ensued. The price of VW shares skyrocketed several hundred percent, briefly topping 1,000 Euros. Investors who had shorted VW lost billions covering their positions in the squeeze. Porsche SE collected outrageous profits at the expense of plaintiffs and others by releasing some of its shares into the market at artificial prices.

The April 29 filing reveals previously unknown details of Porsche SE’s plan. The new allegations include that:

• Less than a week before Porsche SE revealed the truth — that it had amassed control of more than 74 percent of VW’s shares — it conducted phone calls with investment advisors in New York during which Porsche SE sought to reassure the New York-based investment advisors that it was nowhere near 75 percent control. Among the false statements Porsche SE made was that although it would acquire a simple majority of VW shares, “going to 75% is not on the agenda.” Porsche SE told another fund that it would stop acquiring shares after achieving 50–55% control.

• Porsche SE admitted to at least one plaintiff that it was spreading its options trades around to multiple counterparties to avoid detection.

• Porsche SE’s fraudulent strategy deliberately targeted short sellers. In order to secretly obtain 75 percent ownership in VW, Porsche needed short sellers to borrow stock from owners who would not or could not sell the stock themselves and then to sell it to Porsche or Porsche’s call-option counterparties. Without the additional supply created by short sellers, Porsche could never have gained control of 75 percent.

• Porsche SE financed its call-option strategy in part through selling put options. As the price of VW declined in the third week of October 2008, Porsche SE’s liability on the puts it had sold threatened to force the company into bankruptcy. It avoided this threat by forcing the price of VW up, which it accomplished by announcing its call-option position on October 26, triggering the squeeze.

The case is pending in the Southern District of New York, where it is captioned as Elliott Associates, L.P., et al, v. Porsche Automobil Holding SE, et al, No. 10-civ-532 (HB)(THK).

The funds are represented by Bartlit Beck Herman Palenchar & Scott LLP (see www.bartlit-beck.com) and Kleinberg, Kaplan, Wolf & Cohen, P.C. (www.kkwc.com).

SOURCE – Elliott Associates, L.P

Favorable operational trend of the holdings Porsche and Volkswagen

Stuttgart. Porsche Automobil Holding SE, Stuttgart, can report a favorable operational trend of its holdings in the first half of the 2009/10 fiscal year ending 31 July 2010. The Porsche Zwischenholding GmbH group including mainly the Porsche AG recorded in the reporting period a double-digit return on sales with an operating profit of 329 million euro. Revenue increased by 3.7 percent in relation to the comparative period of the prior year to 3.16 billion euro. Unit sales fell 1.7 percent to 33,670 vehicles. The Volkswagen group has been included in the half-yearly financial report of the Porsche SE with the result for the period from 1 July 2009 to 31 December 2009. On this basis, the Volkswagen group sold 3,302,144 vehicles in the first half of the 2009/10 fiscal year. With revenue of 54.0 billion euro, the operating profit comes to 615 million euro.

As already announced, the Porsche SE still expects negative earnings before tax for the 2009/10 fiscal year. This will include several accounting effects, some of which will offset each other. The effects are due, among other things, to the deconsolidation of the Volkswagen group as of 3 December 2009 and deconsolidation of the Porsche Zwischenholding GmbH group as of 7 December 2009 as well as to accounting for the two groups using the equity method in the consolidated financial statements of Porsche SE. These structural changes were already reflected in Porsche SE’s six-month report as of 31 January 2010, which reports a group profit after tax of 871 million euro.

The profit of Porsche SE is expected to be reduced by various factors in the second half of the 2009/10 fiscal year because it is not participating in the capital increase planned by Volkswagen AG for the first half of 2010. The extraordinary general meeting of Volkswagen AG had adopted a resolution on 3 December 2009 to create authorized capital and issue up to 135 million new preference shares. The extent of dilution of Porsche SE’s share in capital of Volkswagen AG and the associated impact on earnings will depend on the form that the capital increase takes and will also be influenced by the number of new preference shares in Volkswagen issued and their issue price. It will not affect liquidity. Assuming that the capital increase takes place before 31 July 2010 as scheduled, forecasts are for Porsche SE to incur a loss for the 2009/10 fiscal year as a whole of a low single-digit billion-euro figure.

Via Porsche Zwischenholding GmbH, Volkswagen AG assumed a 49.9 percent shareholding in Porsche AG in the course of a capital increase. Porsche SE received cash of approximately 3.9 billion euro as a result, which was mainly used to repay debts. The level of net debt at Porsche SE – not taking into consideration the Porsche Zwischenholding GmbH group and the Volkswagen group – improved to 6.1 billion euro as of 31 January 2010.

Porsche Zwischenholding GmbH group wants to increase sales

The regard of the individual model group series of the Porsche Zwischenholding GmbH including mainly the Porsche AG shows the good start of the new Panamera – sales already reached 8,326 units. The new Porsche model series did not go on sale until September 2009 and in some regions the market launch of the Gran Turismo was not until December 2009. The best selling model series was still the Cayenne, despite the generation change, this spring with 13,454 units sold. This is a fall in unit sales of 19.8 percent on the first six months of the prior year. Unit sales of the 911 came to 7,493 units (down 44.7 percent). Unit sales of vehicles from the Boxster model series, including the Cayman models, recorded 11.3 percent growth to 4,397 vehicles.

An analysis of the sales regions reveals that the situation on the North American market remains difficult. While the unit sales of Porsche there fell by 15.5 percent to 11,113 vehicles, the drop in Europe was just 5.6 percent. The number of vehicles sold in Europe totaled 10,301. In the rest of the world, unit sales of Porsche rose by 20.1 percent to 12,256 vehicles.

A total of 40,685 vehicles were produced, which represents a decrease of 2.4 percent. 16,904 units of the Cayenne and 9,786 of the new Panamera rolled off the assembly line in the reporting period. The number of 911 vehicles produced came to 8,764. Production of the Boxster series totalized 5,231 units. Porsche continues to assume that unit sales for the full fiscal year 2009/10 will exceed the prior-year figure of 75,238 vehicles.

Volkswagen group optimistic for the future

The number of Volkswagen brand passenger cars sold came to 1,808,766 in the first half of the 2009/10 fiscal year. The Golf was the mainstay of sales. Demand for the Fox, Polo, Gol, Tiguan and Passat CC models also developed favorably. Unit sales of the Audi brand in the period stood at 615,769. Sales figures were particularly pleasing for the models from the Audi A3 Sportback series and the Audi A6 sedan. The Škoda brand sold 289,244 vehicles in the first half of 2009/10. The Fabia and Superb models saw increased demand. The new Škoda Yeti was well received by the market. In the first half of 2009/10, unit sales of the SEAT brand came to 161,118 vehicles. Units sales of the Bentley brand in the reporting period came to 2,316 vehicles. The Chinese joint venture boosted unit sales by 779,183 vehicles. Volkswagen commercial vehicles sold 140,099 units in the first half of 2009/10. Scania’s sales totaled 22,776 vehicles.

In the region of Europe/other markets, the Volkswagen group achieved unit sales of 1,730,018 vehicles in the first six months of 2009/10. In North America, unit sales amounted to 238,595 vehicles. Unit sales in South America in the first half of 2009/10 came to 434,245 vehicles, a figure positively impacted by the Brazilian government’s support package. Including the joint ventures in China, the Volkswagen group sold 899,286 vehicles on the passenger car markets in the Asia Pacific region in the first six months of the 2009/10 fiscal year.

In the first half of the 2009/10 fiscal year, the Volkswagen group produced 3,232,180 vehicles worldwide. Production volume was adjusted to the ongoing critical market situation.

The Volkswagen group’s presence in all major regions of the world, its multi-brand strategy and technological expertise and, as a result, the youngest, most environmentally friendly and widest range of vehicles are key success factors. The nine brands of the Volkswagen group will present a large number of new models in calendar 2010, continuously expanding the group’s position on the world’s markets in the process. The Volkswagen group therefore expects the number of vehicles delivered to customers in 2010 to exceed the 2009 level.

With the half-yearly financial report for the financial year 2009/10, the Porsche SE presents for the first time its figures as a financial holding company, whose substantial holdings represent the Volkswagen AG and the Porsche Zwischenholding GmbH group. As the next step on the way to the integrated automotive group is planned the implementation of a capital increase at the Porsche SE in the first half of 2011.

Plans are to reach the final stage in creating an integrated automotive group, namely the merger between Porsche SE and Volkswagen, following the capital increase. The combination of Volkswagen and Porsche in a group with ten strong brands has compelling strategic, industrial and financial logic. The integrated group is expected to be able to realize considerable additional growth in future.

]]> http://www.pmletter.com/blog/2010/05/08/porsche-se-favorable-fiscal-year-2010/feed/ 0 http://www.pmletter.com/blog/2010/04/29/porsche-appoints-maier-altrichter-to-new-senior-positions/ http://www.pmletter.com/blog/2010/04/29/porsche-appoints-maier-altrichter-to-new-senior-positions/#comments Thu, 29 Apr 2010 20:02:25 +0000 Thom http://www.pmletter.com/blog/?p=3573

Bernhard Maier Appointed Board Member Sales and Marketing of Porsche AG

Stuttgart. In a recent session  the Supervisory Board of Dr. Ing. h.c. F. Porsche AG, Stuttgart, appointed Bernhard Maier (50) to the Board of Management of the manufacturer of sporting premium cars. Maier, previously Chairman of the Management of Porsche Deutschland GmbH, Bietigheim-Bissingen, is assuming the top position in the Sales and Marketing Division with immediate effect. Klaus Berning, the previous Board Member Sales and Marketing, is leaving the Company with immediate effect at his own request.

Maier has been closely connected to the automobile ever since his youth, first completing his training as a car mechanic and then, after obtaining his full qualification as a master mechanic, studying business management in the town of Calw near Stuttgart. After working for Nixdorf, Maier joined the BMW AG sales organisation in 1988, assuming various top positions in Germany and abroad. In June 2001 Maier joined Porsche, where he successfully managed the Company’s domestic sales subsidiary. His most significant responsibilities so far include the ongoing optimisation of processes in sales management as well as the development of new systems and the establishment of a consistently positive position for the Porsche brand in the Company’s home market. Further highlights in Maier’s term in office as the Managing Director of Porsche Germany were the successful introduction of two new model series: the Cayenne Sports Utility Vehicle in 2002 and the Panamera Gran Turismo in September of last year.

Bernhard Maier

Stephan Altrichter appointed the new head of Porsche Schweiz AG

Stuttgart . Dr. Ing. h.c. F. Porsche AG, Stuttgart, has appointed Stephan Altrichter (47) as the new head of Porsche Schweiz AG. Altrichter, who was previously the managing director of the Berlin and Potsdam Porsche centre, will assume management of the Swiss sales subsidiary for the premium sports car manufacturer effective immediately. He is replacing Thomas Lamperstorfer who left the company of his own request. Altrichter will be succeeded in Berlin by Stephan Blässing (45), the previous head of the Porsche Center in Düsseldorf.

Stephan Altrichter

Stephan Altrichter held various positions with Mercedes-Benz AG and Daimler-Chrysler AG between 1989 and 1999, managing, among other things, the Mercedes-Benz office in New York. With a degree in business and engineering, he also worked for AT Kearney and Bain & Company as a corporate consultant. With a background in wholesale, retail, and export, Stephan Blässing was the director of sales at Mercedes-Benz Magdeburg prior to coming to Porsche. From 2007 to 2010, he headed up the Porsche Center in Düsseldorf.

Stuttgart/São Paulo. With the founding of a second international subsidiary, Porsche Consulting GmbH, which is based in Bietigheim-Bissingen, Germany, and is in its 16th year of operation, has consistently remained true to its international growth course. After opening a branch office in Italy, Porsche Consulting is now following up with its first base for overseas corporate consulting with Porsche Consulting Brasil. “Thanks to this new location, we are now closer to our South American clients and can better develop very interesting markets on site. As an experienced specialist for process optimization, we are seeing an enormous demand for consulting services in this rapidly growing and developing economy,” said Eberhard Weiblen, Chairman of the Management Board, during the recent grand opening of the office in Sao Paulo.

The Bietigheim based consultancy, a subsidiary of Dr. Ing. h.c. F. Porsche AG, Stuttgart, has implemented lean management methods, which have been used very successfully in the production of premium sports cars for many years, in various other business segments and even in public administrations. The company focuses on increasing efficiency by avoiding all types of waste, such as redundant tasks, superfluous stock-keeping, unnecessary waiting times. At the same time, with the introduction of proven methods, such as “just in time” and “just in sequence”, cycle and flow principles are employed, thereby making possible reliable, continuous processes, reproducible at any time, which increase operating efficiency.

“Brazilian companies are frequently very well positioned when it comes to strategy and financial management. But I see potential for improving processes in administration, increasing quality, and, above all, in interacting with suppliers. In these areas, there is often a great deal of capital not being utilized,” according to Weiblen, who now intends to analyze local requirements more intensively.

Clients from Brazil have relied on the German experts for lean processes since 2006 and clients from Argentina have been benefiting from their services since 2008. The 12-member founding team in Sao Paulo is made up of Brazilian and German employees who have, on the average, eight years of experience working in a wide variety of industries. Heading up the founding team is Jürgen Lochner (44). He has been with Porsche Consulting since 1998 and more recently as a partner with the consultancy in Bietigheim.

Lochner would like to increase the success of South American companies by making them “leaner, more flexible, and efficient.” The company will initially focus on manufacturing companies, but its target groups also include the construction industry, hospitals, as well as the transport and logistics sector.

Worldwide, a total of 222 employees from Porsche Consulting handle about 250 projects for 150 clients annually. Revenues posted for the 2008/2009 fiscal year were €61.4 million. In the meantime, one-third of the company’s activities are overseas. The goal of each consultation is to introduce a continuous improvement process that all employees actively take part in and develop themselves over the long term. “Our contribution is to help them help themselves,” said Weiblen.

Dr. Wolfgang Porsche Remains Chairman, Uwe Hück is his Deputy

Stuttgart. After a resolution had been passed during an extraordinary general shareholders’ meeting of the Dr. Ing. h.c. F. Porsche AG to increase the number of members on the Supervisory Board to 20, as of April 19, 2010, the constituent meeting of the newly formed Supervisory Board was held. The leadership of the Supervisory Board has not changed: during the April 19, 2010 meeting the Board unanimously reelected Dr. Wolfgang Porsche as its Chairman and Uwe Hück as his Deputy.

In addition to Dr. Wolfgang Porsche, the shareholders continue to be represented on the Supervisory Board also by Prof. Dr. Ferdinand K. Piëch, Dr. Ferdinand Oliver Porsche, Hans-Peter Porsche, and Dr. Hans Michel Piëch. New Members of the Board are Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG and Chairman of the Board of Management of Porsche Automobil Holding SE, Hans Dieter Pötsch, Member of the Board of Management of Volkswagen AG and Member of the Board of Management of Porsche Automobil Holding SE, Dr. Francisco Javier Garcia Sanz, Member of the Board of Management of Volkswagen AG, Christian Klingler, Member of the Board of Management of Volkswagen AG, and Prof. Dr. Horst Neumann, Member of the Board of Management of Volkswagen AG. Ferdinand Piëch jr., Prof. Dr. Ulrich Lehner, and Josef Ahorner are no longer on the Supervisory Board of Porsche AG.

As in the past, the employees are represented on the Supervisory Board by Uwe Hück, Werner Weresch, Antonio Girone, Walter Uhl, Rolf Frech, Jürgen Kapfer, Hans Baur and Hansjörg Schmierer. As a result of the increase in size of the Board, Günther Magerer, the Deputy Chairman of the Works Council of Porsche AG and Member of the Works Council of Porsche Automobil Holding SE and Kai Bliesener, the Press Spokesman of the IG Metall Baden-Württemberg metalworkers’ union, were appointed as the new employee representatives.

In the session, the Supervisory Board appointed Dr. Hans Michel Piëch, Prof. Dr. Martin Winterkorn, Hans Dieter Pötsch as representatives of the investors and Hans Baur, Werner Weresch, and Walter Uhl as representatives of the employees to join Dr. Wolfgang Porsche and Uwe Hück as Members of the Permanent Committee of the Supervisory Board.

FRANKFURT (Reuters) — Volkswagen AG’s merger with Porsche Automobil Holding SE still faces significant legal and tax risks, according to details from VW’s prospectus for last month’s capital increase. The risks stem from potential tax liabilities and hedge fund lawsuits alleging former Porsche executives manipulated markets during the Stuttgart-based company’s attempted takeover of VW, Europe’s largest automaker. These risks could force the companies to delay or abandon a planned merger of Porsche SE into VW next year, VW said in its prospectus published in late March.

A spokesman for Volkswagen on Thursday said its plans to merge in 2011 “have not changed”.

A spokesman for Porsche says the risks listed in the prospectus stem from a legal document which lists “every possible risk” even if the likelihood of these risks materializing is “limited.”

A banker familiar with the matter said it was too early to say whether Porsche and VW’s merger plans needed to be delayed. Another banker said the level of risks factors listed in the prospectus was “unusual.”

In a note published on Thursday, Bernstein Research analyst Max Warburton said the risks could force VW to pay cash for a remaining 50.1 percent stake in Porsche SE’s sports car business, Porsche AG. This, in turn, could be bad for Porsche and VW. For Volkswagen, a cash deal may mean “significant indebtedness or the need for a further capital raising,” Warburton wrote.

Porsche Insolvency Feared

A cash deal would also probably trigger significant writedowns related to Porsche, Warburton said. VW’s prospectus says the damages sought by hedge funds for alleged breaches of capital markets rules could “place a considerable burden on Porsche’s financial resources and liquidity position, and if substantial in magnitude, could even lead to the insolvency of Porsche Automobil Holding SE.” In January a group of investment funds sued Porsche SE and two former top executives accusing them of fraud in a “short squeeze” that caused the funds to lose more than $1 billion. Potential liabilities at Porsche SE — the family-controlled holding company — could prevent the planned merger, VW said in the prospectus. ”The merger may not be possible at all, or may only be carried out at a later date, and the planned target structure of the integrated automotive company with Porsche may not be achieved or may only be achieved at a later point,” it said. Porsche SE racked up billions of euros in debt in an attempt to acquire 75 percent control of VW’s votes, leading to the dismissal of Porsche’s two top managers, CEO Wendelin Wiedeking and finance chief Holger Haerter, and what in effect is a reverse takeover by VW. The first step was selling to VW a 49.9 percent stake in Porsche AG sports car business.

A summary of the VW-Porsche deal as set out so far

Porsche AG Stake

– VW acquired a 49.9 percent stake in sports car maker Porsche AG for 3.9 billion euros ($5.8 billion) in Dec. 2009. Volkswagen valued Porsche AG and Porsche Holding, Europe’s largest car dealership group, at a combined total of 16 billion euros in equity and debt.

– On Nov. 24, 2009, VW entered into an agreement with Porsche that grants Porsche Holding Salzburg the right to sell the operating trading business to VW by Dec. 31, 2013.

Car Dealership

– The Porsche and Piech families will sell their automobile dealership business — Europe’s largest, with annual unit sales of 474,000 vehicles — to VW starting in 2011. The business was assigned an enterprise value of 3.55 billion euros.

VW Capital Increase

– In March 2010, Volkswagen launched its announced capital increase, issuing up to 65 million preferred shares to finance its merger with Porsche, and will raise net proceeds of about 4.1 billion euros ($5.46 billion).

Porsche Capital Increase

– Porsche SE will issue new voting and preference shares, probably in the first half of 2011. It gave no details, but sources close to the situation have said its owner families aim to raise about 5 billion euros.

Lower Saxony

– VW’s home state will maintain the right to veto strategic issues and to name two VW supervisory board members. This will be anchored in VW’s articles of association.

Fiscal Year

– With regard to the creation of an integrated automotive group with Volkswagen, the fiscal year of Porsche, which currently runs from Aug. 1 to July 31 of the following year, should be changed to run concurrently with the calendar year effective January 1, 2011. An abbreviated fiscal year will be created for the period from Aug. 1, 2010 to December 31, 2010.

Merger Terms

– The exact merger terms are to be set in time for a deal to conclude in 2011. The extended Porsche and Piech clan will remain the largest shareholders with a stake of 35 percent to 40 percent, followed by Lower Saxony. The Gulf state of Qatar is in advanced talks that could make it the third-largest shareholder in VW.

– The combined company will have 10 brands, adding the Porsche marque to a stable that already includes Audi, Bentley, Bugatti, Skoda, Seat and Lamborghini.

– Porsche’s creditor banks and regulatory authorities have to approve the merger.

Article – Courtesy Automotive News: April 9, 2010 06:01 CET - UPDATED: April 9 10:15 CET

Nürburgring Long Distance Championship – Round 1

Three Successful Porsche Premieres

Stuttgart. A successful weekend for Porsche at the season-opener of the Nürburgring Long Distance Championship: At its race premiere, the new Porsche 911 GT3 R claimed victory, the innovative 911 GT3 R Hybrid debuted with sixth place and Walter Röhrl made his much celebrated comeback after 17 years.

The Manthey GT3 RS of Bernhard, Lieb, and Tiemann enroute to a podium finish

Timo Bernhard (Germany), Marc Lieb (Germany) and Marcel Tiemann (Monaco) are the winners of the first race of the season on the Nürburgring-Nordschleife. With the new, 480 hp Porsche 911 GT3 R fielded by the Manthey Racing team, the trio drove a trouble-free race. “It is extraordinary to climb to the top of the podium at the first race ever of a new race car,” said a pleased Bernhard. His works driver teammate Lieb added: “It seems the new 911 GT3 R has inherited the reliability of all racing 911.” With 14.5 and 3.6 seconds respectively, the three Porsche pilots relegated the best Audi RS and the BMW M3 to finish second and third.

The Porsche GT3 R Hybrid enroute to 6th place with Lietz, Bergmeister, and Ragginger driving

The new Porsche 911 GT3 R Hybrid also gave a promising debut: Porsche works drivers Joerg Bergmeister (Germany), Richard Lietz and the former Porsche Junior Martin Ragginger (both Austria) brought home the white/orange racer with its combustion engine supplemented by two electric motors delivering 60 kW each to the front axle in sixth place after a trouble-free race. “I’m positively surprised how well this car performed already at its first race,” said Bergmeister. “We tried many things out during the race and will be busy further developing the hybrid drive for the 24 hour race in May. Our aim is to use less fuel than our competitors without compromising performance,” explains Lietz.

After 17 years: Walter Rohrl is back - with Chris Harris and Horst von Saurma-Jeltsch co-driving

Double world rally champion Walter Röhrl (Germany) made his much applauded racing comeback after 17 years. Sharing driving duties with Horst von Saurma-Jeltsch (Germany) and Chris Harris (Great Britain) he put the standard 450 hp Porsche 911 GT3 R through a test under race conditions. “The car exceeded my highest expectations and I had a great time at the wheel,” enthused Röhrl. “We were able to match the pace of thoroughbred race cars. The 911 GT3 RS was particularly sensational in fast corners and under braking. And the best thing is, if it wasn’t so far tonight I could just put our number plate on the car and drive back to Bavaria without a problem.”

Round two of the Nürburgring Long Distance Championship takes off on 10 April at midday with a duration of four hours.

Courtesy Porsche AG

Special Exhibition in the Porsche Museum from 20 March to 9 May 2010

Stuttgart. The home of today’s Dr. Ing. h.c. F. Porsche AG, Stuttgart, has a very special sound in the world of motoring: Zuffenhausen. Indeed, Zuffenhausen is far more than “just” a production plant rich in tradition for Porsche AG, since it is here in Zuffenhausen that the heart of the Company beats to this very day. Zuffenhausen has been Porsche’s home address for more than 70 years and more than one million Porsche sports cars have been built here in Stuttgart since 1950.

The Porsche Design and Construction office moved from Kronenstrasse 24 in downtown Stuttgart to the new group of buildings in the District of Zuffenhausen way back in June 1938. Right from the beginning, important chapters in the history of the automobile were then written in Porsche’s home plant: This is where the first series of the car destined to become the Volkswagen Beetle was built in 1938, followed in 1939 by the Type 64 as the great-grandfather of all Porsche sports cars to come in later years. Originally planned for the Berlin-Rome long-distance race, this aerodynamic, highly streamlined sports car became the trendsetter for all Porsche models to follow.

After the first few units of the Porsche 356 had been built in the Austrian town of Gmünd as of 1948, Porsche returned to Stuttgart as a genuine “car city” in late 1949. With the Porsche Plant in Zuffenhausen still being occupied at the time by the US military, Porsche first rented a production hall on the premises of the nearby Reutter & Co. GmbH Coachbuilding and Body Construction Plant, starting to prepare production in early 1950.

With the first Type 356 being completed in Stuttgart on 6 April 1950, overall production up to the end of the year amounted to 369 units. The success of Porsche’s sports cars is borne out clearly not only by the Company’s sales figures, but also by the further expansion of the production facilities in Zuffenhausen. The buildings forming Porsche Plant 2 designed by the well-known architect Rolf Gutbrod were completed in 1952 and in 1956 the 10,000th Porsche 356 left the plant, which was consistently enlarged and upgraded over the years. Porsche Plant 3 followed in 1960, also housing the Sales and Customer Service Departments.

Immediately after the introduction of the Porsche 911, Porsche KG, as the Company was still called at the time, took over the Reutter Coachbuilding and Body Construction Company in 1964 with its workforce of approximately 1,000 employees. Today the complete 911 model series as well as models of the Boxster series and all Porsche engines are built in Zuffenhausen.

The Plant is split up into the Bodyshop, Paint shop, Vehicle Assembly, Upholstery, Engine Assembly and Test Dynamometers. To ensure flexible production in a confined area, Porsche has developed special solutions including multi-floor production in the Bodyshop and Vehicle Assembly. A further special feature is that Porsche’s series models are built together with the racing versions on one and the same assembly line. As yet a further highlight a new, particularly ecological Paint shop will be opened in 2011. Currently being built in the direct vicinity of Plants 1 and 5, the new Paint shop will be situated on the former premises of Dürr AG purchased by Porsche in spring 2008.

The new Porsche Museum was opened in January 2009 as an additional pledge to Zuffenhausen. Here, virtually on the Company’s home ground, some 80 historical cars and exhibits from the history of the Company are presented in an exhibition area of 5,600 square metres or 60,200 square feet. As the most spectacular building project commissioned by Porsche, the Porsche Museum has not only gone down in the history of the Company, but also enriches the entire Stuttgart Region as an outstanding highlight in culture and architecture.

The Porsche Museum is honouring the 60th anniversary of Porsche in Zuffenhausen with a special exhibition: The beginnings and the ongoing development of production at Zuffenhausen are being presented by a series of photos in this exhibition from 20 March to 9 May 2010. A further outstanding highlight is the first Porsche 356 Coupé built in Zuffenhausen shown for the first time in the Museum after an unusual restoration process.

The Porsche Museum is opened Tuesdays to Sundays from 9:00 to 18:00. For further information, Log on to: www.porsche.com/museum.

Courtesy Porsche AG