Ferdinand Piech resigns as VW Chairman

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Chattanooga, TN (WDEF)-According to Automotive News, Volkswagen Chairman, Ferdinand Piech has resigned. 

FRANKFURT– Ferdinand Piech, a towering figure at Volkswagen for more than two decades, resigned as chairman of the company on Saturday after losing a showdown with Chief Executive Martin Winterkorn.

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Piech, the 78-year-old grandson of the inventor of the Volkswagen Beetle, had previously succeeded in ousting other executives who crossed him, including his hand-picked successor as Volkswagen CEO, Bernd Pischetsrieder.

But this time, he was unexpectedly isolated in a five-to-one vote of Volkswagen’s steering committee last week as labor representatives, the state of Lower Saxony and even his own cousin Wolfgang Porsche stood firmly behind Winterkorn.

"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," the six-member panel said in a statement after another meeting on Saturday.

"Against this background, Professor Doctor Ferdinand K. Piech resigned from his office as chairman as well as all his supervisory board mandates within the Volkswagen group with immediate effect," the statement said.

Piech’s term as chairman of VW’s supervisory board was due to expire in April 2017.

The leadership crisis burst into the open this month when the news weekly Der Spiegel quoted Piech, the patriarch of the family that owns 51 percent of voting rights in VW, as saying he had "distanced" himself from CEO Winterkorn.

The comment came at a time when VW is slashing costs and revamping operations to boost profitability. It has struggled in the United States and posted lower profits at its core auto division.

The supervjsory board’s leadership committee backed Winterkorn on April 17, saying he’s the “best possible” head of the company.

Winterkorn, 67, who has led Volkswagen to record profits and put it within grasp of overtaking Toyota Motor Corp. as the world’s biggest carmaker, appeared at a meeting of the steering committee in Piech’s hometown of Salzburg, Austria, on April 16 to fight for his job.

The six-member body proposed extending Winterkorn’s contract beyond 2016.

The group usually prepares the meetings of VW’s 20-person supervisory board, which is comprised of voting-shareholder and labor representatives and has the power to hire and fire executives, in addition to making other major corporate decisions.

Deputy Chairman Berthold Huber will assume interim leadership of the board until the election of a new chairman, Volkswagen said on Saturday, adding that Piech’s wife Ursula had also resigned from the supervisory board.

Reuters, autonews and Bloomberg contributed to this report