Ferdinand Piëch

Ferdinand Karl Piëch  (17 April 1937 – 25 August 2019) was an Austrian business magnate, engineer and executive who was the chairman of the executive board (Vorstandsvorsitzender) of Volkswagen Group in 1993-2002 and the chairman of the supervisory board (Aufsichtsratsvorsitzender) of Volkswagen Group in 2002-2015.

A grandson of Ferdinand Porsche, Piëch started his career at Porsche, before leaving for Audi after an agreement that no member of the Porsche or Piëch families should be involved in the day-to-day operations of the Porsche company. Piëch eventually became the head of Audi, where he is credited with evolving and growing Audi into a competitor to equal Mercedes-Benz and BMW, thanks in part to innovative designs such as the Quattro and 100. In 1993, Piëch became the chairman and CEO of Volkswagen Group, which he is credited with turning into the large conglomerate it is today; He oversaw the purchase of Lamborghini and Bentley, as well as the founding of Bugatti Automobiles, all of which he integrated with the Volkswagen, Škoda, SEAT and Audi brands into a ladder-type structure similar to that used by Alfred Sloan at General Motors. Piëch was required to retire at age 65 per Volkswagen company policy, but he remained on its supervisory board and was involved in the company's strategic decisions until his resignation on 25 April 2015.

Educated as an engineer, Piëch influenced the development of numerous significant cars including the Porsche 911, Audi Quattro and notably, the Bugatti Veyron, which as of 2012 was the fastest, most powerful and most expensive road legal automobile ever built. Due to his influence on the automobile industry, Piëch was named the Car Executive of the Century in 1999 and was inducted into the Automotive Hall of Fame in 2014.

Biography

Piëch was born in Vienna, Austria, to Louise (née Porsche; Ferdinand's daughter) and Anton Piëch, a lawyer. He studied at the Lyceum Alpinum Zuoz and graduated from the ETH Zurich, Switzerland, in 1962, with a degree in mechanical engineering, having written a master thesis about the development of a Formula One (F1) engine. At the same time, Porsche was involved in F1 and developed an 8-cylinder engine for the Porsche 804.

From 1963 to 1971, he worked at Porsche in Stuttgart, on the development of the Porsche 906 and following models that led to the successful Porsche 917. In 1972, he moved to Audi in Ingolstadt. Starting from 1975, he was manager of technological engineering, being responsible for the concepts of the Audi 80 and Audi 100. He celebrated his 40th birthday on 17 April 1977 with a ball at which guests included Giorgetto Giugiaro and at which the staff of the Porsche Hotel presented him with an Audi 80 that was just 40 cm (16 in) long and constructed of marzipan. In 1977 he also initiated the development of a car for the World Rally Championship, resulting in the four-wheel drive Audi Quattro. The engine used in the Quattro model was a turbocharged inline-5 cylinder unit.

Piëch held a small engineering company in the time between leaving Porsche AG and joining Audi, and while there, he developed a 5 cylinder in-line diesel engine for Mercedes-Benz. He picked up the concept again after moving to Audi, because there was a market demand for engines with more than 4 cylinders. At the time, Audi (and the Audi-derived VW Passat/Santana model range) used longitudinally mounted inline engines and front wheel drive. More conservative layouts with 6 cylinders were rejected because of engineering and production costs (V6 engine) or packaging requirements (straight 6 did not fit because front wheel drive required that it be mounted in front of the axle).

In 1993, Piëch moved to Volkswagen AG, parent company of the Volkswagen Group, where he became Chairman of the Board of Management, succeeding Carl Hahn. At that time Volkswagen was only three months from bankruptcy, and he was central to orchestrating its dramatic turnaround. He retired from the Board of Management in 2002, but still serves in an advisory capacity as Chairman of the Supervisory Board. In 2000, he was named chairman of Scania AB. He retired from the management board in 2002 and was succeeded as chairman by Bernd Pischetsrieder.

While head of Volkswagen Group, Piëch was known for his aggressive moves into other markets. He drove the Volkswagen and Audi brands upmarket with great success. Piëch also pursued other marques, successfully acquiring Lamborghini for Audi, and establishing Bugatti Automobiles SAS. His purchase of British Rolls-Royce and Bentley was more controversial. After successfully buying the Crewe, England, carbuilding operation, VW was denied the use of the Rolls-Royce brand name. Piëch later claimed that he only really wanted the Bentley brand, but at the time the loss of Rolls to rival BMW was widely seen as a major failure.

What was not a failure, however, was his effort to revitalize Volkswagen in North America. Hahn's previous efforts to regain market share in the United States and Canada—which he had built up as the head of Volkswagen of America from 1958 to 1965—were unsuccessful, but Piëch helped reverse VW's fortunes by the decision to manufacture the Volkswagen New Beetle, the introduction of which in 1998 gave Volkswagen of America a much needed impulse.

Due to his continued influence in the auto industry, Automobile Magazine announced that Piëch has won their Man of the Year award for 2011.

Engineering

At Porsche, Piëch triggered significant changes in the company's policy. For example, the position of drivers in race cars was moved from the left to the right, as this gives advantages on the predominantly clockwise race tracks. After making mainly small 2000 cc race cars that were supposed to be closely related to road cars, Porsche made a risky investment by unexpectedly building twenty-five 5000 cc Porsche 917, surprising the rule makers at the FIA. Even Ferrari had needed to sell his company to Fiat before making such a move. Always thinking big, Piëch started development of a 16-cylinder engine for the Can-Am series. It is probably no coincidence that his grandfather had developed a famous supercharged 16-cylinder engine for the Auto Union racing cars in the 1930s. Piëch was denied the chance to complete it, as a turbocharged version of the existing 12-cylinder was simpler, more powerful and very successful. Three decades later as CEO of Volkswagen Group, Piëch insisted on the very ambitious Bugatti Veyron, with a turbocharged W16-cylinder, 1,001 horsepower (746 kW) and 407 km/h (253 mph) top speed. Some of these figures are still not higher than those of the Porsche 917/30, but higher than most current racing cars. Piëch was also behind the Volkswagen Phaeton luxury saloon, which was intended as a rival to other German luxury cars, but the sales of the model have been disappointing.

Porsche ownership

Piëch owns a significant share of Porsche, exactly 10%. In order to prevent discussions among the many family members, a policy was established in early 1972 that no Porsche family member is allowed to be involved in the management of the company. Even company founder Ferry Porsche, Piëch's uncle, only held a seat on the supervisory board of Porsche after the company's legal form was changed from a limited partnership to a private legal company. This made Piëch move to Audi after the foundation of his engineering bureau.

Personal life

Piëch fathered 12 children with four different women, and was last married to Ursula (Uschi) Piëch. One of his sons, Toni Piëch, is the founder of car company Piëch Automotive. He was dyslexic, an atheist, and had a vast car collection that includes two Bugatti Veyrons regularly driven by him and his wife. Piëch died suddenly on 25 August 2019 in Rosenheim, Oberbayern, while traveling to take part in a conference.

Personality and management style

An engineer by trade, Ferdinand Piech was both known for his intricate involvement in product development from a technical standpoint, as well as his domineering personality. Piech has been behind the development of multiple significant and influential automobiles, including the Porsche 911, Third generation (C3) Audi 100, Audi Quattro and Bugatti Veyron. Automotive blog Jalopnik said of Piech, "He is the mad genius behind much of Porsche and Audi’s racing successes as well as VW’s all-out engineering and luxury push from the early 2000s. That’s what gave us cars like the Bugatti Veyron and the 12-cylinder VW Phaeton."

Piech is both noted for turning the Audi brand from an also-ran economy car builder to one of the most respected luxury brands in the world, as well as rescuing Volkswagen as a whole from near-bankruptcy and overseeing its transformation into the massive conglomerate it is today. Fellow automotive executive Bob Lutz described Piech as "one of the most successful leaders in the automotive business" and "the greatest living product guy" in the automobile industry. Automotive Newsdescribed Piech as "a world-class eccentric but a figure of transcendent importance in the history of cars and car companies" who has had "The strangest and possibly most significant automotive industry career this side of Henry Ford". In their obituary, The Guardian said of Piech, “His stewardship of VW has been indisputably successful. Piech will go down in history as an automotive legend, in the same class as Gottlieb Daimler, Henry Ford and Kiichiro Toyoda.”

Piech was widely interested in pushing technological boundaries in automotive development, especially as the head of Audi. Automotive News noted of this, "The company’s slogan “Vorsprung durch Technik” was the personification of Piech — the belief that technology was the answer to all problems in the auto business. Audi was the test bed to prove his theory and the springboard for his ambition." Piech often spearheaded the development of audacious vehicles or oversaw business decision and strategies that baffled analysts, but still proved beneficial for the company as a whole. In recounting some of the extraordinary vehicles Volkswagen put in production under Piech's watch, Wired noted that he alone pushed the Bugatti Veyron supercar into production, despite objection from other executives as well as the fact that Volkswagen lost what is believed to be millions on every Veyron sold: "Consider that for a moment. Long past the average retirement age, this gent greenlit one of the largest automotive losses in history and managed to keep his job. Moreover, he was hailed as a hero."

An aggressive and demanding manager, Piëch was known for setting both lofty and extremely specific goals and standards for projects. An example of this is with the development of the Volkswagen Phaeton luxury car, in which Piëch laid out ten parameters the car had to meet, amongst them being that the Phaeton should be capable of being driven all day at 300 km/h (186 mph) with an exterior temperature of 50 °C (122 °F) whilst maintaining the interior temperature at 22 °C (72 °F). Piëch requested this even though the Phaeton's top speed was electronically limited to 250 km/h (155.3 mph). Another requirement was that the car should possess torsional rigidity of 37,000 N·m/degree. Piech would often become personally involved in vehicle development, such as how he oversaw the development of the Audi 100's aerodynamics himself, keeping it secret from even Audi's top engineers to prevent any crucial details of the car's aerodynamic capabilities from leaking to competitors.

With a leadership style described as "old fashioned", Piech was known for his prolific firing of subordinates throughout his career, particularly how he engineered the ousting of former Volkswagen CEO Bernd Pischetsrieder and Porsche CEO Wendelin Wiedeking. According to Piëch, he fires any subordinate who "makes the same mistake twice". The Guardiannoted, "Piech was known for his ability to outmanoeuvre competitors by stoking internal rivalries to his own advantage, even if it resulted in turning against his own managers, including the VW chief executive Bernd Pischetsrieder, to side with VW’s labour leaders." Piech has leveraged this reputation to use threats and intimidation to get subordinates to meet his lofty goals; upon his induction into the Automotive Hall of Fame in 2014, fellow automotive executive Bob Lutz recounted a conversation he had with Piëch at the Frankfurt Auto Show in the early 1990s, in which he remarked how he was impressed with the fit and finish and tight body tolerances on Volkswagen's new models. Piëch told Lutz that he achieved this by assembling Volkswagen's top body engineers in his office and telling them they would all be fired if all of Volkswagen's vehicles didn't have body tolerances of 3 millimeters within six weeks. When Lutz noted how Piech's methods run counter to the management styles of American companies, Piech told Lutz, "[Americans say]'I would like to have tighter body gaps', you do not want tighter body gaps! There is a tremendous difference between liking to have and wanting! I wanted it!"

Described as "Machiavellian" and "an autocrat's autocrat", Wired noted of Piech, "no one else seems to hold, or as boldly exercise, such autocratic control. This is, after all, the man who pushed—some say steamrolled—the 1,000-hp Bugatti Veyron to production, a move that reportedly produced a whopping seven-figure loss per car." Bob Lutz said of his management style, "It's what I call a reign of terror and a culture where performance was driven by fear and intimidation[...]That management style gets short-term results, but it's a culture that's extremely dangerous. Look at dictators. Dictators invariably wind up destroying the very countries they thought their omniscience and omnipotence would make great. It's fast and it's efficient, but at huge risk."  Lutz, CNBC, the American documentary TV series Dirty Money, among others, have claimed that the Volkswagen diesel emissions scandal is the result of the ruthless and tyrannical corporate culture Piech installed at the company.

Piech has been described as having an abrasive personality as well as being socially awkward. Automotive News noted, "Many of his CEO peers said they could not hold a normal conversation with him. Discussions could be punctuated with long stretches of unexplained silence." Car and Driver magazine commentator John Phillips said, "[Piech's smile] has been known to lower ambient temperatures 15 degrees." Phillips recounted how when he first met Piech in 1981, he tried to break the ice by telling Piech about how his father bought one of the first Audi 100s, to which Piech angrily retorted that the C2 Audi 100 was the worst car he ever worked on, stunning Phillips and making him immediately move to the other side of the room. Phillips also recounted that when he first tested the Volkswagen New Beetle in 1997, Piech showed up unannounced, hopped in the passenger seat with a clipboard and demanded Phillips' opinions on the car's performance and handling as he tested it. Later in the road test, Piech told Phillips a story about how he damaged his father's Beetle as a child, which cost him a year's allowance to pay for the repair; Phillips interpreted the story as a threat rather than a friendly anecdote. Bob Lutz described Piech as a "mad genius" that while he respected, he would never want to work for or with at any capacity. Automobile Magazine writer Georg Kacher noted how when he was testing the Volkswagen Phaeton upon its launch in Abu Dhabi, Piech rode along in the backseat and demanded he take the car to its 186 MPH top speed down a public highway. When Kacher expressed nervousness at all the speed cameras he was tripping, Piech responded, "Keep your foot down, it's all paid for."