Porsche to Seize Control of Volkswagen

Plan to Purchase Controlling Interest Approved

What may be the quintessential sports car maker, Porsche, announced plans to seek a controlling interest in the Wolfsburg-based automotive giant Volkswagen group last month, submitting a proposal to German anti-trust authorities to gain clearance to purchase the remaining stock required. Already owning 21.2 percent of VW (Porsche owned 18.5 percent earlier this year but it has purchased most of its 3.4 percent available options in recent months), Porsche and the Peoples Car have had a longstanding and successful relationship, dating all the way back to Ferdinand Porsches design of the Beetle.

The pairs partnership began with Hitlers requirement for a car for working Germans in the 30s. As the premier German designer at the time, Ferdinand Porsche was charged with the design of the car, and constructed the now famous rear-engine, rear-wheel drive Beetle. With economy being the overall goal, Porsche built the car to be as frugal as possible, tuning the air-cooled engine  to be a fuel miser, while Porsches Chief Designer at the time put the body in a wind tunnel to fine tune the shape, making the Beetle one of the first cars to be designed with a thought to airflow.

During World War II, VWs production line tooled up for military vehicles, and the basic Beetle chassis (and even shape) was used in the Kubelwagen utility vehicle and even the amphibious and aptly named Shwimmwagen. After the war, Volkswagen was decimated; quite literally. Allied bombing left the factory in ruins, and as a producer of military goods, everything was seized for reparations. Put under the command of an Englishmen, the factory was considered useless until the English commander painted one of the Beetles green and shipped it back to Allied Headquarters as a demonstrator. Shortly thereafter, the Allied forces within Germany, sorely lacking transportation, opted to purchase 20,000 of the little runabouts.

Fast forward seventy years and little has changed: with the announcement that Volkswagen will build Porsches uber-sedan, the Panamera, the pairs ties are stronger than ever; the two currently sharing the Toureg/Q7/Cayenne platform. As a major parts supplier to the worlds last large-volume independent sports car builder, Volkswagen is obviously incredibly important to Stuttgart, and as such Porsche is not inclined to see Volkswagen fall into the proverbial wrong hands, hence the interest in purchasing the requisite 25.1 percent of Volkswagen stock to give it control.

Porsche has been purchasing Volkswagen stock steadily since they announced a plan to acquire 20 percent of Germanys largest automaker last September, at a cost of $3.8 billion to fend off hostile takeovers, sharing the rest of the stock with Volkswagen and the Government of Lower Saxony. Now, with the approval of the takeover plan being granted late last week, the sports car company is legally allowed to purchase the remaining 3.5 percent needed to gain a controlling interest, effectively putting all fears of a hostile takeover to rest.