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Volkswagen exec booted after trying to push out CEO, reports say

"The mutual trust necessary for successful cooperation was no longer there," Volkswagen said in a statement Saturday.

By Doug G. Ware
German automaker Volkswagen voted to remove supervisory committee chairman Ferdinand Piech on Saturday, April 25, 2015, perhaps bringing to an end a power struggle within the company between Piech and CEO Martin Winterkorn. Photo: UPI/Brian Kersey
German automaker Volkswagen voted to remove supervisory committee chairman Ferdinand Piech on Saturday, April 25, 2015, perhaps bringing to an end a power struggle within the company between Piech and CEO Martin Winterkorn. Photo: UPI/Brian Kersey | License Photo

WOLFSBURG, Germany, April 25 (UPI) -- Europe's largest automaker on Saturday said chairman Ferdinand Piëch has resigned his seat on Volkswagen's supervisory board, not long after he attempted to have the company's CEO ousted in an ongoing power struggle.

Volkswagen announced Piëch's departure about a week after it renewed the contract of CEO Martin Winterkorn. The 78-year-old Austrian executive has served in the role for 13 years.

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Piëch's departure might come as a surprise to many industry analysts, because the executive is used to getting his way, the New York Times reported Saturday. An executive committee at Volkswagen decided last week, in a 5-to-1 vote, to remove Piëch, Forbes reported.

"The members of the steering committee came to a consensus that, in the light of the past weeks, the mutual trust necessary for successful cooperation was no longer there," Volkswagen said in a statement, which noted that Piëch's wife will also lose her seat on the supervisory board.

Earlier this month, Piëch attempted to have Winterkorn removed from his post. However, the plan backfired when the CEO refused to go and other members of the board stood behind him. The board's deputy chairman, Berthold Huber, will take over Piëch's seat on an interim basis, the Times report said.

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"Ferdinand Piëch has made an enormous contribution to Volkswagen and the entire automobile industry," Huber said. "The developments of the last two weeks have, however, led to a loss of trust between the supervisory board chairman and the other members, which in recent days has proven to be impossible to resolve."

Piëch initiated the power struggle earlier this month when he told a German news outlet that he was distancing himself from Winterkorn. And in the past, analysts said, the chairman always got what he wanted.

But, apparently, not this time.

Piëch joined Volkswagen AG in 1993, when he began revamping the automaker's approach to the vehicle market. Instead of focusing on middle-class buyers, Volkswagen under Piëch's leadership sought out additional demographics -- and ultimately purchased Porsche, Bentley and Lamborghini to appeal to wealthy drivers.

The chairman's leadership has long been felt in the automotive industry. The grandson of Porsche founder Ferdinand Porsche, Piëch turned the automaker into a global automotive giant when he arrived in the early 1990s as CEO.

Winterkorn, who became VW's chief executive in 2007, will continue in the post with the company's full support and Volkswagen hopes Piëch's departure will end the power struggle.

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"The uncertainty had to be ended today," Huber said Saturday. "The steering committee was and is conscious of its responsibility to Volkswagen and its many thousand staff."

The removal of such a long-serving, power-wielding executive prompted analysts to speculate that major additional changes at Volkswagen might be afoot.

"Piech's departure represents a seismic shift in Volkswagen's power structure, and could foretell drastic changes in how one of the world's largest automakers operates," Karl Brauer, a senior analyst at Kelley Blue Book, said.

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