Ferdinand Piech (1937-2019): The man who made VW global

Towering among his peers, a giant of the auto industry died Sunday night in Rosenheim/Upper Bavaria, Germany. Ferdinand Piëch, a grandson of Ferdinand Porsche, who conceived the original Volkswagen in the 1930s, was the most polarizing automotive executive of our times. And one who brought automotive technology further than anyone else.

Ferdinand Porsche had a son, Ferdinand (called “Ferry”), and a daughter, Louise, who married the Viennese lawyer Anton Piëch. They gave birth to Ferdinand Piëch, and his proximity to two Alfa Romeo sports cars — Porsche had done some work for the Italians — and the “Berlin-Rome-Berlin” race car, developed by Porsche himself, gave birth to Piëch’s interest in cars.

After his teachers in Salzburg told his mother he was “too stupid” to attend school there, Piëch, who was open about his dyslexia, was sent to a boarding school in Switzerland. He subsequently moved on to Porsche, where he fixed issues with the 904 race car and did major work on the 911. But his greatest project was the Le Mans-winning 917 race car, developed at breathtaking financial cost. It annihilated the competition, but the family had had enough: Amid growing tension among the four cousins working at Porsche and Piëch’s uncle Ferry, the family decided to pull every family member, except for Ferry, out of their management positions. Piëch started his own consultancy business, where he designed the famous five-cylinder diesel for Mercedes-Benz, but quickly moved on to Audi, first as an engineer and then as CEO, where he set out to transform the dull brand into a technology leader.

Piëch killed the Wankel engine and hammered out a number of ambitious and sophisticated technologies. Among them: The five-cylinder gasoline engine, which — to Piëch’s dismay — was killed off in the mid-1990s; Quattro all-wheel drive and Audi’s fantastic rally successes; and turbocharging, developed with Fritz Indra, whom Piëch recruited from Alpina. The Audi 100/200/5000 became the world’s fastest production sedan, thanks to their superior aerodynamics.

Piëch also launched zinc-coated bodies for longevity — and gave diesel technology a decisive boost with the advent of the fast and ultra-efficient TDI engines. Less known: Piëch also decided to put larger gas tanks into cars. Customers loved it.

Piëch’s first-generation Audi V8 was met with derision by competitors; it was too obviously based on the 200/5000. But at the presentation in Aschheim near Munich, Piëch just noted: “We are wearing the mink inside.” The competition stopped laughing when the V8’s successor, the first-gen A8, was launched with a fully aluminum structure.

But Piëch had his sights on something even bigger: He entered the battle for VW AG’s top position against then-VW brand chief Daniel Goudevert, a soft-spoken Frenchman with “green” tendencies. The labor unions took Piëch’s side: In the early 1990s, the problems at VW were mounting and threatening to crush the corporation. It was not the time for green visions, but for visions of automotive excellence.

Piëch triggered an incredible product offensive, taking Volkswagen far upmarket. The first car out of Wolfsburg that showed his handwriting was the Passat B5; it set benchmarks in technology, fit and finish. The Golf Mk IV was another one. Piëch also set out to create a comprehensive platform strategy. VW’s models were suddenly on par with premium brands, sometimes exceeding their standards.

Piëch pushed for the dual-clutch transmission — and he set the groundwork for an empire by buying Lamborghini, Bugatti and Bentley. He was behind the V10 TDI and V12 TDI, the W12 engine and Bugatti’s W16; Piëch kept pushing technology to new horizons. And he was obsessed with efficiency, not just with power: He fought for the ultra-efficient Lupo 3L TDI and the Audi A2 TDI. The Volkswagen XL1 is unsurpassed to this day. Yet he stopped work on the “Swatch-Car,” the brainchild of Swiss watchmaker Nicolas Hayek. Piëch didn’t take Hayek seriously and ironically promised VW wouldn’t do a “Passat watch.” Hayek later peddled his project to Daimler, where it morphed into the infamous Smart. 

Low points of Piëch’s tenure in Wolfsburg included the battle surrounding José Ignacio López, hired from GM for his cost-cutting skills. Extracting López from GM enraged the Americans to the point of accusing him of stealing corporate secrets. VW served up $100 million to GM to avoid a courtroom battle. Piëch later commented dryly: “In my 40 years in the business, my admiration for Opel has never reached the level of arousing my interest in any secrets behind it.”

One of his most colorful battles involved the Piëch/Porsche families and the takeover of Volkswagen plotted by then-Porsche CEO Wendelin Wiedeking. In the process, the baroque and loud Porsche chief acted like he was in charge already, warning there would be “no sacred cows” in Wolfsburg. Piëch seethed at Wiedeking’s criticism of VW’s corporate culture and disregard of its engineering achievements — and pulled the rug from under the Porsche chief’s and cousin Wolfgang Porsche’s feet. He was not to be outsmarted.

A few years later, a former Piëch acolyte turned against him: Martin Winterkorn teamed up with politicians — the state of Lower Saxony owns a stake in VW — and labor unions to thwart plans to install Piëch’s wife and longtime advisor Ursula at the head of VW’s supervisory board. Piëch stepped down. Less than half a year later, the diesel scandal broke loose. It is rumored that Piëch had great misgivings about the initially nonchalant treatment of the topic. The VW Group’s humiliation in the diesel scandal must have hit him sharply. The automotive giant he had forged — and which he would have liked to call “Auto Union” — was left crumbling, and the VW brand’s upscale positioning has been adjusted downmarket again, much to where it was when Piëch took over in 1993.

Piëch’s hierarchical, authoritarian management style contradicted fashionable management wisdom — but proved extremely successful. He respected alpha males of equal caliber: a few statesmen, race drivers, even powerful union leaders. But if you didn’t take responsibility, you were on your way out. When he became Audi CEO, he reportedly told his top management: “Meine Herren, with one third of you I am satisfied, another third will have to improve, and the last third will have to leave.” And thus it happened.

Piëch believed in internal competition and therefore, e.g., had no problem with developing an Audi V-6 and a Volkswagen VR-6 almost simultaneously, or developing the Phaeton while the Audi A8 was still looking for its place among luxury sedans. He uses the same method for his managers. “Piëch takes pleasure in seeing his managers fight out the battles,” a company executive told this writer.

“Whenever Piëch entered the room, the temperature dropped by several degrees,” I am told. Yet his matter-of-fact style empowered many. “A significant styling decision on a Golf took two minutes. Piëch liked my proposal, and that’s all that was needed,” remembers a former VW designer, who now works for a competitor. “At my new employer, it would take two years.”

A legendary tale from Piëch’s time as chief engineer at Audi has a number of designers and executives waiting for Piëch to appear at a presentation … and waiting … and waiting. To the illustrious crowd’s great surprise, a manhole cover suddenly lifted up, and Piëch himself appeared from the abyss — and had a word to say about the security measures for that top-secret presentation.

And finally: His driving skills were supreme among his peers. “He was very fast,” said a VW executive, “and he could drive like there was no tomorrow.”