For decades it’s been the world’s greatest automotive civil war, pitting two branches of the same family against each other in intrigues, battles and financial conquests that put the Sunni-Shiite wars of the Middle East to shame. It fact, the last battle for the ultimate control of the Volkswagen empire got so brutal that even wealthy Middle Easterners refused to get involved until the final king was elevated to his throne and crowned. And you know it has to be pretty bad when rulers in the Middle East throw up their hands and say, “Call us when the dust has settled.” Of course we’re referring to the Porsche Piech Game of Thrones.
For the life of me I can’t imagine why HBO hasn’t turned this into one of its acclaimed series. It has far more family drama than The Sopranos, better comedy than The Simpsons, and it’s based on real people with easily proven real histories — unlike the extremely popular Dynasty or even “our own homegrown” Dallas.
It starts simply enough with the original all-knowing prophet, Ferdinand Porsche. He had two children, Wolfgang (better known as Ferry) and Louise. It’s now the third generation of the Lannister, excuse me, Porsche family; Ferry’s kids have always carried the hallowed last name of Porsche. The children born of Louise could carry her husband’s last name, Piech. And the split between these two lines of the Porsche family ultimately began with how each side had reared its children.
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According to Dietmar Hawranek’s exceptional 2009 Der Spiegel columns covering the VW wars, Louise and her husband Anton sent their children to boarding schools — apparently not America’s blue-blood New England boarding schools. No, instead their children were educated in a system designed to toughen one up, to turn you into something like a strict elitist. Even son Ferdinand, currently chairman of the VW group, was quoted as saying about his schooling that it left him “with an extremely strong mistrust of others.” He added that many things “can only be achieved by doing them yourself, because you can’t rely on others.”
Ferry’s children, on the other hand, attended schools based on the principles of Rudolf Steiner, the founder of the Anthroposophy spiritual movement. Without putting too fine a point on it, from the early 70s forward the battles for the heart and soul of Germany’s largest auto group seemingly was between the flower children and the mindset of the descendants of National Socialists. While I certainly don’t want to give away the ending, guess who wins?
A Heck of a Deal
It didn’t start that way. No, as the Second World War ended, everything grandfather Ferdinand Porsche had worked a lifetime to create lay in ruins. Ferry Porsche and his sister Louise Piech had to find a way to move the remains of their father’s shattered empire forward. And their new beginning started in the middle of September in 1948.
At the time Volkswagen was just getting back into production under the supervision of the British military, but the patent rights for the Beetle were still held by the Porsche family’s private engineering firm. The agreement was that VW would pay a royalty of 5 German marks for every Beetle produced; the VW plant would supply equipment for production of vehicles to be sold under the Porsche name; and the Porsche family received all rights to sell Volkswagen for all of Austria.
In reality, that worked well for Ferry Porsche’s side of the family. They would build their respected sports car company using their family name, all the while receiving billions of dollars in royalty payments and financial assistance from VW — not to mention engineering expertise through the years, right up until the Porsche Cayenne SUV. And then there are the Porsche family’s dealerships in Austria, where revenues before the financial meltdown reached $18 billion annually. But we’re getting ahead of the story.
The War Begins
Of course all of this started with Louise’s son, Ferdinand, in the 1960s. At the time an engineer with Porsche, he would eternally battle the corporate accountants; his engineering cost a fortune, but in the end it produced the famed Porsche 917 sports car — which won Porsche its first-ever victories at Le Mans in 1970 and 1971.
As would be the case throughout Ferdinand Piech’s career, money would never be an obstacle in the pursuit of building cars that he wanted built. Engineering was engineering — and it must never be starved of the cash needed to turn an automotive dream into reality. This drive toward the ultimate in engineering quality, and never mind the cost, was what would lead him to demand that the 2002 Volkswagen Phaeton be able to drive for 24 hours at a constant speed of 186 miles an hour, when there is nowhere in the world that this could ever possibly happen.
Likewise, it’s what led him to buy the nameplate Bugatti to resurrect that brand; but the first design of the new Veyron was completely undriveable, which meant it had to be completely reengineered from the ground up. And on that model, over the last 10 years each and every Veyron sold lost the company $6.25 million.
Finally in 1970, partially because of Piech’s free spending ways, uncle Ferry Porsche was forced to call for a family gathering in Zell am See. That town in Austria was chosen for a specific reason: It was where Ferry and Louise had fled with their children to escape the carnage in Germany during the Second World War. Ferry Porsche hoped that, by taking the whole clan back to what was once the family’s safe haven, serenity would reign and the Porsche’s two branches could remember their common roots and come to some agreement on their future.
Apparently Ferry had forgotten something important: He was a man who had sent his kids to alternative schools, while the other branch of his clan had been raising “take no prisoners” warriors. According to Der Spiegel’s 2009 history, the family gathering turned into a series of loud, drawn-out battles. In the end enough was enough; and it was decided that from that day on, none of the family members would ever work at Porsche again.
The Legend Continues
When Piech’s overpriced but successful Porsche 917 won the Le Mans for the second time the following year, he was already out of the company and into his own design group. And, while that part of his career had an extremely short life, he did design the famed five-cylinder inline diesel, which became a mainstay of Mercedes vehicles for well over a decade.
In spite of that immediate success, Piech quickly moved on to Audi. He saw it as the jumping-off point from which, one day, he would not merely have gained control of all Volkswagen, but he would have outmaneuvered all of his cousins on the Porsche side of the family too.
Along the way Piech would have his share of major automotive successes — and failures. He would father at least 12 children with four different women, not all of them his wives. But to be fair, he did marry the nanny, who remains his wife to this day. Oh, and he had an affair with one of his Porsche cousins’ wife, which when she left her husband forced him to sell off his stake in the company. Early on, small cracks were forming in the empire that one day would bring it down.
That’s right. It’s like a modern-day plot line for Game of Thrones; only Tywin Lannister has nothing on Piech.
And it continues next week.
© Ed Wallace 2015
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism. He hosts Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: email@example.com; read all of Ed’s work at www.insideautomotive.com.