News: Porsche is about to face bankruptcy!

Porsche Liebhaber

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^Well, not in that manner, I like Porsche the way it is, and I'm afraid that it's gonna change
 

ahpadt

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The worst thing that can happen is that VW/Audi decide the power output of future 911's, making them either less/more powerful than the R8.
 
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Porsche Liebhaber

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Reports:
Porsche deeper in debt than thought​

The financial woes of Germany's Porsche are bigger than previously thought, media are reporting. The sports car maker is some 14 billion euros ($20 billion) in debt, about 5 billion more than Porsche had earlier said.



According to media reports, Porsche was on the brink of insolvency when the struggle between the sports car maker and Volkswagen finally came to a head.

Focus has reported that Porsche would have been insolvent within two weeks had VW not pushed through with its takeover ambitions. Ironically, the maker of iconic sports car like the 911 had initially wanted to gain control over Volkswagen ? and it was the financial burden of that very takeover bid that pushed the sports car maker to the edge.

Porsche had always said its debt level was at around nine billion euros ($13 billion), yet on Saturday the newsmagazines Focus and Der Spiegel both reported that marathon talks between Porsche and VW revealed that in fact, Porsche has run up debts of as much as 14 billion euros.
More info:
http://www.dw-world.de/dw/article/0,,4517635,00.html
 

MacGuffin

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Ooops. Yeah, that's GM levels of stupidity right there...
With one major difference: VW is a successful company, which produces lots of attractive, high quality cars that sell very well, and has the means to compensate for those debts without having to fall on their knees before the government (and the public) to beg for some cash.


Meanwhile, the EU announced to check on the legitimacy of the so-called "VW Law" again, that guarantees the German state of Lower Saxony a blocking minority of 20 %, which basically prevents anyone from taking over the VW group.

However, according to the latest news they are too late.

The Porsche and the Piech families have agreed to write that "VW Law" as a clause into the company's charter -- which is legal if a simple majority of the shareholders agrees to it in the general meeting.

Let's see... the Porsche and Piech families own close to 50 % of VW, the state of Lower Saxony 20 %. So this can only fail, if Lower Saxony objects to it. Rrrrright...

And that, folks, is how you knock out the EU Commission.
 
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WillDAQ

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I'm starting to think Porsche shouldn't be bailed out but be allowed to fail instead. Rather than VW having to take on huge debt for it's own shares which Porsche bought at a premium it could just hoover them up at the Porsche fire sale.

There are a lot of Porsche fans in this thread worried about the impact all this will have on the Porsche line up, by rights the company should be bankrupt, so VW get to impose whatever restrictions they want. Porsche is VW's bitch now.
 

un-dee

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VW is being and has always been run by the Porsche family (mainly Ferdinand Piech). Lets not forget that, they are car people and wouldn't just ruin Porsche out of some random marketing plan.
 

WillDAQ

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VW is being and has always been run by the Porsche family (mainly Ferdinand Piech). Lets not forget that, they are car people and wouldn't just ruin Porsche out of some random marketing plan.
Porsche used to be the Porsche half of the family, VW the Piech side. The two sides hate each other.. Hence, with Piech in control who knows.
 

shad_68

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^But it was a really stupid move from Porsche
The original plan, maybe.
But the end result is still quite good for the Porsche family.

Porsche used to be the Porsche half of the family, VW the Piech side. The two sides hate each other.. Hence, with Piech in control who knows.
Yeah, but Piech's beef is with the Porsche family. Remember, he started out at Porsche, and e.g. pushed the 917 through against the disapproval of Porsche family members etc., and apparently only moved to Audi because of the "no family running the business"-rule established in the 70ies - I don't think he'd take it out on the company itself.
 
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hajj

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I'm starting to think Porsche shouldn't be bailed out but be allowed to fail instead. Rather than VW having to take on huge debt for it's own shares which Porsche bought at a premium it could just hoover them up at the Porsche fire sale.
And tell us why would VW want to buy their own shares? If Porsche were to firesale their shares, they would still be able to reduce their debt to a healthy level. VW is probably overvalued by a factor 4 to 5, so if Porsche were to sell their shares they should be able to recoup ?10bn. This of course would not have been in the interest of the Porsche owner families.
 

WillDAQ

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And tell us why would VW want to buy their own shares
Considering the number of shares Porsche would have to sell the market value is going to drop, thus providing VW an opportunity to buy them back relatively cheaply. It also reduced the risk of this whole debacle being played out again in the future.
 

hajj

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If they buy back shares, they will have to reduce the amount of issued shares. So Lower Saxony will end up with 40% of the shares as biggest single shareholder. Besides the reduced capital base will also increase borrowing costs and will likely trigger renegotiations on existing debt. So basically your idea is utter nonsense. ;)
 

Faab

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VW is buying Porsche to save them from themselves and both will be better companies for it
.
For concerned Porsch-o-philes, to sort out who is going to control what and divine a future for the two-as-one:

-Just remember that there are family rules on direct control of Porsche Automobil Holdings SE, where the family members F.A. Porsche and Ferdinand Piech etc are not allowed to be involved in the regular management and operations of the company. Each owns around 12% personally...

-Piech has been working around this rule (for the benefit of all car nuts) by running Volkswagen AG and all the associated brands.

-VW AG was Piech's brainchild, so just look at the avalanche of products and people that he has called into existence: From the Bugatti to Martin Winterkorn.

-Porsche has climbed to it's current position under the direction of Wendelin Wiedeking. Wiedeking is a textbook businessman/carmaker responsible for the Cayenne, Coxster, "New" Boxter made from recycled 996 parts, and the marketing-to-death of all else Porsche. Their current debt-load predicament and liquidity/cash flow issues are a result of his model expansion and attempt to take over VW.

-Porsche's goal under Wiedeking was to take over VW and kill off halo programs like the Veyron that did not turn a profit standing alone. If you want to make any comparison to the US automakers or even to Toyota not turning a profit this past year, this is where you need to look. Wiedeking and Co. were following the GM playbook to a "T" assuming that GM had simply not executed the plan properly.

-Porsche and VW together will flourish under Piech and their collective upper management for one reason: PRODUCT IS KING

-No cost-cutting measure or clever marketing will replace good cars in the long term and VW doesn't make companies worse when it takes over (Think Skoda, Bentley, Lamborghini, SEAT....).

Check Reuters financials for VW AG if you don't believe me...but remember you love cars because of the car itself, and not the market penetration of entry-level luxury sportscars and the contribution margin of your particular unit.

Long winded I know....but I'd prefer to make the point.
 

WillDAQ

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If they buy back shares, they will have to reduce the amount of issued shares. So Lower Saxony will end up with 40% of the shares as biggest single shareholder. Besides the reduced capital base will also increase borrowing costs and will likely trigger renegotiations on existing debt. So basically your idea is utter nonsense. ;)
Well obviously they're not going to buy back the full Porsche stake, more than a single digit buy back isn't going to happen. I don't think a couple of % increase for Lower Saxony will worry VW too much, they already have power disproportionate to their share of the ownership.
 

Der Stig

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This is how I expect/would like to see it:

Pros:
Cheaper parts and labor

Cons:
Porsche Chili/Audi Q5 and other crappy crossovers


My hope is that VW treats Porsche like BMW did Rolls-Royce. Hell both companies helped their respective sides fight in WWII and they're both doing well working together.
 
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