By Victoria Waldersee and Ilona Wissenbach
BERLIN/FRANKFURT – Volkswagen buyers consider incoming CEO Oliver Blume will wrestle to guide each the Volkswagen Group and Porsche – and to tug off a deliberate itemizing of the sports activities automobile maker whereas carrying each hats.
Friday’s announcement that group CEO Herbert Diess would get replaced by Porsche boss Blume has rekindled investor considerations about company governance issues at Europe’s high carmaker, which some shareholders have mentioned weighs on the inventory’s efficiency.
“Blume can’t handle all the pieces … this underscores the unhealthy company administration at Wolfsburg,” mentioned Ingo Speich, head of sustainability and company governance at top-20 Volkswagen investor Deka Funding, referring to the German carmaking group’s headquarters.
“It's poison for the Porsche IPO,” Speich added. Volkswagen plans to checklist the posh automobiles division within the fourth quarter.
Porsche AG might already must go public at a steep low cost if it decides to go forward with the itemizing as financial obstacles mount, Reuters reported final week.
These considerations have been exacerbated by questions over how Blume can handle his twin function.
“Mr Blume will keep his function as CEO together with after a potential IPO,” Volkswagen mentioned on Monday in response to Reuters’ questions.
Simply days earlier than his appointment was introduced, Blume and different Porsche AG executives talking at its capital markets day offered a potential itemizing of the sports activities automobile model as a method to offer it extra independence and entrepreneurial freedom whereas elevating funds for the group.
His twin function calls that independence into query, analysts at Stifel and UBS mentioned.
“Such a double mandate can solely exist quickly in an emergency state of affairs – it gained’t work within the long-term,” mentioned Ulrich Hocker of the German Affiliation for the Safety of Securities (DSW), which represents retail buyers.
Nonetheless, most don't at this stage count on a delay to the itemizing. Some, together with automobile business veteran Ferdinand Dudenhoeffer speculated Porsche finance chief Lutz Meschke might finally take over from Blume on the sports activities automobile model.
In its assertion on Friday, Volkswagen didn't define any succession planning for Blume at Porsche.
Volkswagen’s share value has almost halved since March 2021, underperforming a 17% drop within the STOXX Europe 600 Cars & Elements Index over the identical interval.
The carmaker solutions to a fancy net of buyers – its supervisory board managed by employees’ representatives and regional authorities, and a holding firm owned by the Porsche and Piech households, staffed partly with Volkswagen executives.
Porsche AG’s Meschke is on the board of Porsche Automobil Holding SE, Volkswagen’s high shareholder and proprietor of greater than half its voting rights, whereas Volkswagen’s chairman Hans Dieter Poetsch is its CEO.
Tensions over who pulls the strings in Wolfsburg have spelled the tip of the highway for a number of Volkswagen executives earlier than Diess, with former CEO Bernd Pischetsrieder and former VW model chief Wolfgang Bernhard pressured out of their jobs within the late 2000s after repeated clashes with the works council.
Whereas Diess is basically given credit score for Volkswagen’s pivot to electrification – lifting the carmaker from the reputational smash of the Dieselgate scandal to main Europe’s electrical automobile market – the governance points brought on by his confrontational method to management finally weighed on the funding case, analysts at Stifel Europe Fairness Analysis mentioned.
“Poor company governance makes many buyers shrink back,” Janne Werning, who heads ESG Capital Markets & Stewardship at Union Funding, a top-10 shareholder in Volkswagen, mentioned on the carmaker’s annual common assembly (AGM) final 12 months.
Union Funding, which repeated its criticism of Volkswagen’s governance at the newest AGM in Could, declined to remark for this text.
Post a Comment