Porsche skirted bankruptcy!

Bit off more they can chew.... http://www.autoblog.com/2009/05/25/r...-bankruptcy-i/

Here's a link to the original article in Der Spiegel in English. Another deadline looming on June 19.... CEO Wiedeking is on his way out. Ironic how VW & Porsche seem to be permanently connected in one way or another..... http://www.spiegel.de/international/...626666,00.html

Yeah, I've been worried about this for a few weeks. It's not looking good for Porsche and I worry about the future of the Porsche platforms with VW under control. VW is a good company, but their strength comes from shared parts and platforms - only the outer skin is different. I know that this has provided quality improvements for Lamborghini (which was a broken company), but I really wonder what they could do for Porsche considering that they're already the most profitable car company in the world and have a very nice and reliable product line. It's funny how quickly fortunes change... only a couple of months ago we were talking about Porsche buying VW and now it's the other way around.

This is what happens when the finance guys take over. Porsche was one of the most profitable car companies in the world, then it became a financing ploy. they lost site of being a premier maker of some of the best cars in the world. With the advent of the 996 we have all seen the problems of cars, particularly the engines, designed to be mass produced without thorough engineering. Again it was a financial approach to the business. However, in the early 2000's they were doing great, selling more 996/991's than they ever had, and also selling the Boxsters and Cayennes, huge profit margins and tremendous profits in general. Then came the ill conceived, il timed and unsuccessful atempt to take over VW. They took on over $9 billion in debt in this attempt just at the time when the economy was tanking and the world market for cars went south. Had it been successful they would have bought VW cheap, and made huge amount of money, but that is not what Porsche was all about. Instead the plan failed, the stock is down (VW) and they are stuck with an incredible amount of debt service when the market for their cars has also gone south. Had they kept focused they would have been able to ride out these tough times with their cash reserves. Now they will probably be taken over by anothe firm at a rock bottom price. Quite frankly I think it serves them right. They got greedy and let the finance guys take over and try to become one of the biggest car makers rather than one of the best.

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You're missing a huge point. No enterprise is about making stuff for the betterment of mankind - not a single one. Every company is a cash machine for the shareholders - how the cash is made is absolutely irrelevant - it's 100% about cash generation. You blame the finance guys for this mess, and yes, they took a bet and lost, but finance guys are not evil - they were doing their job to generate shareholder value. Their bet only failed because the credit market tanked. When it looked like the bet was going to work everyone was hailing them for their genius.

Greed and the desire for more power did them in! Their egos became larger than their bank account. They went after quantity instead of concentrating on the fact that they were immensely successful by keeping the company at a manageable size, which allowed them to achieve a high level of quality in designing and manufacturing these fine cars.

When I walk into a casino with hopes to win big, I'm also prepared to lose. You pay to play. And I know how much I can afford to lose, if you don't then you're in trouble.

it's the classic problem of successful companies getting away from their core business. this happened to domestic automakers in their heyday. chrysler used to make refrigerators and other non-auto related products in the 50s or 60s, IIRC. i think the "golden goose" parable may apply here. although, thinking about it, there are many companies that have changed or shifted their core business. berkshire hathaway comes to mind.

Try to remember that if it wasn't for the 996 being introduced, Porsche would have long been gone........... The 996, by itself, saved Porsche's @ss!

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Actually, it was probably the 986 that saved their butts - cemented by the 996 after that...

The Panamera should seal the coffin.

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wise grass-happa

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Wise grass-happa or wise-*** grass-happa?

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To say that the decision to acquire control of VW was ill-conceived, one would have to know what the strategic purpose of the acquisition was and the details of Porsche's acquisition plan. I doubt that any of us really know, in scope and depth, much about either. With hindsight, we know the obvious: deteriorating credit markets and precipitous declines in sales volume hurt Porsche's ability to execute. That in itself doesn't make the planned transaction ill-conceived, however. In my own meager knowledge of the events, I remember reading how Porsche realized that VW was priced inexpensively and would be attractive to acquisition by other companies. Further, Porsche wanted to keep its current and future collaborative arrangements (design, engineering, and construction, to name three areas important to Porsche) intact and safe, rather than controlled by some other, potentially less willing new owners of VW. The idea of acquiring VW to preserve these "assets" seemed well-conceived to me, and crucial to Porsche's future success. Ill-conceived? Maybe, but I don't think so. (Thanks to Meister Fahrer for the link to Der Spiegel article, "auf Englisch")

If you want to feel more connected to Porsche (closer than just owning a Porsche automobile), you may want to consider owning stock in the company. Like the stocks of a lot of companies, Porsche shares have ridden a roller coaster over the last 52 weeks, going from a high of $133 to around $38 per share. It has since climbed back to $64. The stock symbol is POAHF.PK. Good luck!

Read this for more info. I still think that if Porsche had concentrated on their business instead of attempting the takeover of VW they would have been able to weather the current economic downturn. Now there seems to be questions of its survival. http://www.spiegel.de/international/...626666,00.html

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I agree, like many Americans, and many in other countries, Porsche took on too much debt at the worst possible time. If they are still in business by the end of the year, I assume it will be under the VW brand. Sad, but after watching several of the biggest investment banks in the US go belly-up in a matter of days, this doesn't look good for Porsche. Shows how a company can have a great product, but still wind up in deep trouble by over-extending themselves betting on the direction of the financial markets. We 996 owners own Porsches made by Porsche! Something future generations of 911 owners might not be able to say.

Let's hope they can survive as an independent company. Despite the weight of their debt, an uptick in the North American market (which I feel is going to happen by year-end) will help immeasurably.

The Emir of Qatar seems a willing partner. "Wendy Wiedeking can go easier on the Klonopin. If the sources of the German magazine Focus aren’t mistaken, Porsche’s CEO has found someone who can help him out of his financial predicament: His Highness Sheikh Hamad bin Khalifa Al Thani. The Emir of Qatar gave Wiedeking his royal word that he will shake loose several billions on Porsche’s behalf. Or rather the Sheikh’s sovereign wealth fund Qatar Investment Authority (QIA) will fork over the money. Focus says they have a handshake, but no signed paper because two options are on the table: the Sheikh buys shares of Porsche . . . or Volkswagen. Porsche has 51 percent of Volkswagen. They also have options for another 24 percent. To exercise those options costs money. Money Porsche doesn’t have. If His Highness steps in and buys the 24 percent, Porsche could say “good riddance” to most of their €9 billion debt and party like it’s 2008. Porsche would hold 51 percent, Lower Saxony 20 percent, the Sheikh 24 percent, the remaining five percent can be owned by you and me. The scarcity of the stock should keep the valuation high. The Porsche and Piech families love this option. Ferdinand Piech hates it; he wants VW to gobble-up Porsche."

They have to refinance a bunch of their debt by June 19th. (that's when VW options may likely be dumped by banks if they don't)

and meanwhile they are wiring cash to Finland every month NOT to build 987's. Madness.