Porsche Assimilated Into the Volkswagen Collective

“We are Volkswagen. Resistance is futile. Your technological distinctiveness will be added to our own.” Or something like that.

Volkswagen Collective

Porsche Assimilation

Like the “Borg” in television’s Star Trek: The Next Generation series, Volkswagen has been attempting to assimilate Porsche for years with the latter seeking to enlarge its own stake in Volkswagen in 2005. Financial turmoil nearly pushed Porsche into bankruptcy in 2008 with Volkswagen initiating its own plan to take over Porsche.

Those plans were resisted by Porsche management, but Volkswagen’s relentless overtures finally caused its German associate to join the Volkswagen collective.

Happy Together

“Porsche and Volkswagen belong together,” Chief Executive Officer Martin Winterkorn said at a press conference this week at VW headquarters in Wolfsburg. “By working with one another we will raise the company to a new level. We are on the way to being number one.”

Number one for Volkswagen means selling more cars than the General Motors Company, the current top-seller of passenger vehicles in the world. In 2011, GM resumed its position as top automaker as Toyota Motor Corporation sales dropped following earthquakes and floods in Japan and Thailand respectively. Those disasters affected Toyota output and provided the Volkswagen Group with an opportunity to take the second place spot just ahead of Toyota.

Family Ties

Volkswagen AG chairman Piech and Wolfgang Porsche, Chairman of the Supervisory Board at Porsche Automobil Holding SE are cousins, and both are grandchildren of Ferdinand Porsche. The two have been in a power struggle for control of a multi-billion dollar automotive powerhouse, with Der Spiegel outlining the drama in a three-part expose in 2009.

Volkswagen’s quest for No. 1 has it projecting itself on top of the market by 2018. However, it seems likely that we’ll see VW in first place at least five years earlier than that given its strength in China and its ability to quickly absorb brands and maximize output. Yet, with 12 brands now under its roof, Volkswagen may find itself like GM did in 2009 when the U.S. automaker had a dozen brands of its own to manage. GM ended up filing for bankruptcy, shedding four of its brands and restructuring its operation.

That fate seems unlikely for Volkswagen, but labor trouble in Europe, differences in management style with Porsche and a testy Suzuki partnership could each present a drag on its own newly-expanded operation. Perhaps ripping a page from the Borg playbook will help smooth out what could prove to be a choppy transition.

So, is it a collective or a collection?