Volkswagen board leaders back CEO Winterkorn after struggle

Friday, April 17, 2015, Vol. 39, No. 16

BERLIN (AP) — Volkswagen CEO Martin Winterkorn will remain in his job and can look forward to having his contract extended, the leadership of the board said Friday, after a comment by chairman Ferdinand Piech raised widespread doubts about his future.

A turbulent week for Europe's biggest automaker started when Piech, who is the board chairman and has long been a key powerbroker, was quoted last Friday as telling Der Spiegel magazine he was "at a distance from Winterkorn."

That surprised observers and prompted fevered speculation about the position of Winterkorn, 67, Volkswagen's CEO since 2007. Winterkorn's contract runs until the end of next year.

Winterkorn "is the best possible" chief executive for Volkswagen, a statement from the six-strong executive committee of Volkswagen's 20-member supervisory board said. Piech is part of the committee.

It added that the body "places great importance on the fact" that Winterkorn "will pursue his role ... with the same vigor and success as before, and that he has the full support of the committee in doing so."

The committee will propose extending Winterkorn's contract at a board meeting next February, it said.

Piech, himself a former CEO, didn't specify last week what his issue with Winterkorn was, though experts have pointed to concerns about profitability at the core Volkswagen brand and a disappointing market share in the U.S. as possible factors.

Winterkorn has received backing from the head of Volkswagen's influential employee council, while the governor of Lower Saxony state, a minority shareholder, criticized the public discussion about the company's leadership. Union and employee representatives make up half of major German companies' supervisory boards.

The Piech and Porsche families together control a majority of shares in Volkswagen. Board member Wolfgang Porsche said in a statement Sunday that Piech's comment about Winterkorn represents "his private opinion" and wasn't cleared with his family.

Volkswagen shares were trading 0.2 percent higher at 238.05 euros ($254.92) after the announcement, the only company that was up on Frankfurt's DAX index of blue chip stocks.