Porsche-VW merge
05-07-2009, 03:26 AM
#1
Burning Brakes
Thread Starter
Porsche-VW merge
I just heard the news of Porsche-VW merge.
1. Do you think this is good for Porsche?
VW sells EDIT: 4.7 Million cars, Porsche only 100,000.
2. Will Porsche decrease quality and prestige and go for the massive sales,
becoming just another VW brand?
3. Will Porsche boss resign?
1. Do you think this is good for Porsche?
VW sells EDIT: 4.7 Million cars, Porsche only 100,000.
2. Will Porsche decrease quality and prestige and go for the massive sales,
becoming just another VW brand?
3. Will Porsche boss resign?
Last edited by JDSStudios; 05-09-2009 at 04:05 AM.
05-07-2009, 01:20 PM
#7
the news here is that porsche has decided NOT to take over 75 %, and would rather a merger occur, limiting its exposure. Someone in 997 board has correctly stated that the buyout wass bassed on credit not cash and now the debt service is too costly for porsche. Must be hard with a 30% world wide decrease in sales....
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05-07-2009, 01:30 PM
#8
Rennlist Member
Yes, but in a nutshell,
Porsche Holding borrowed the money for the stock they bought. Now those loans are due. No banks are currently interested in refinancing the loans because of the world banking crisis and the crash of the world-wide automobile industry. Porsche Holding owes about $9 BILLION on the loans. Only way to resolve the problem is to either sell the stock or ... ta-dah ... merge so that the $8 BILLION VW has in cash reserves in the bank can be used to repay the outstanding loans.
Porsche AG was never the actual purchaser or the actual stock holder. The Porsche/Piech family has a multitude of "holding companies" that actually own the stock and control the two companies. It is not a simple as Porsche AG buying VW Group AG. The F. Porsche decendant family members who control the holding companies often fight among themselves for control of the companies. The Porsche family already owns and controls both companies, and now it is just a contest of will (more like potlatching) within the family members.
Then there is the control of VW Group by the local government which controls 20% of VW Group stock and has passed laws to prohibit the involuntary transfer of power (jobs) away from Lower Saxony or wherever.
This is much on the order of the Hatfields and McCoys in West Virginia. Everybody is actually cousins, and they are fighting over control of the stills.
Porsche Holding borrowed the money for the stock they bought. Now those loans are due. No banks are currently interested in refinancing the loans because of the world banking crisis and the crash of the world-wide automobile industry. Porsche Holding owes about $9 BILLION on the loans. Only way to resolve the problem is to either sell the stock or ... ta-dah ... merge so that the $8 BILLION VW has in cash reserves in the bank can be used to repay the outstanding loans.
Porsche AG was never the actual purchaser or the actual stock holder. The Porsche/Piech family has a multitude of "holding companies" that actually own the stock and control the two companies. It is not a simple as Porsche AG buying VW Group AG. The F. Porsche decendant family members who control the holding companies often fight among themselves for control of the companies. The Porsche family already owns and controls both companies, and now it is just a contest of will (more like potlatching) within the family members.
Then there is the control of VW Group by the local government which controls 20% of VW Group stock and has passed laws to prohibit the involuntary transfer of power (jobs) away from Lower Saxony or wherever.
This is much on the order of the Hatfields and McCoys in West Virginia. Everybody is actually cousins, and they are fighting over control of the stills.
05-08-2009, 05:07 AM
#11
Burning Brakes
Thread Starter
Yes, but in a nutshell,
Porsche Holding borrowed the money for the stock they bought. Now those loans are due. No banks are currently interested in refinancing the loans because of the world banking crisis and the crash of the world-wide automobile industry. Porsche Holding owes about $9 BILLION on the loans. Only way to resolve the problem is to either sell the stock or ... ta-dah ... merge so that the $8 BILLION VW has in cash reserves in the bank can be used to repay the outstanding loans.
Porsche AG was never the actual purchaser or the actual stock holder. The Porsche/Piech family has a multitude of "holding companies" that actually own the stock and control the two companies. It is not a simple as Porsche AG buying VW Group AG. The F. Porsche decendant family members who control the holding companies often fight among themselves for control of the companies. The Porsche family already owns and controls both companies, and now it is just a contest of will (more like potlatching) within the family members.
Then there is the control of VW Group by the local government which controls 20% of VW Group stock and has passed laws to prohibit the involuntary transfer of power (jobs) away from Lower Saxony or wherever.
This is much on the order of the Hatfields and McCoys in West Virginia. Everybody is actually cousins, and they are fighting over control of the stills.
Porsche Holding borrowed the money for the stock they bought. Now those loans are due. No banks are currently interested in refinancing the loans because of the world banking crisis and the crash of the world-wide automobile industry. Porsche Holding owes about $9 BILLION on the loans. Only way to resolve the problem is to either sell the stock or ... ta-dah ... merge so that the $8 BILLION VW has in cash reserves in the bank can be used to repay the outstanding loans.
Porsche AG was never the actual purchaser or the actual stock holder. The Porsche/Piech family has a multitude of "holding companies" that actually own the stock and control the two companies. It is not a simple as Porsche AG buying VW Group AG. The F. Porsche decendant family members who control the holding companies often fight among themselves for control of the companies. The Porsche family already owns and controls both companies, and now it is just a contest of will (more like potlatching) within the family members.
Then there is the control of VW Group by the local government which controls 20% of VW Group stock and has passed laws to prohibit the involuntary transfer of power (jobs) away from Lower Saxony or wherever.
This is much on the order of the Hatfields and McCoys in West Virginia. Everybody is actually cousins, and they are fighting over control of the stills.
2 days ago at the CNBC channel, they ran a segment on the merge;
initially, it was not a merge. Porsche wanted to actually buy VW;
then VW turned it around, and wanted to buy Porsche.
The merge is the latest decision.
They were also wondering if the Porsche CEO would resign.
05-09-2009, 12:44 AM
#12
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I just heard the news of Porsche-VW merge.
1. Do you think this is good for Porsche?
VW sells 6.4 Billion cars, Porsche only 100,000.
2. Will Porsche decrease quality and prestige and go for the massive sales,
becoming just another VW brand?
3. Will Porsche boss resign?
1. Do you think this is good for Porsche?
VW sells 6.4 Billion cars, Porsche only 100,000.
2. Will Porsche decrease quality and prestige and go for the massive sales,
becoming just another VW brand?
3. Will Porsche boss resign?
(just kidding)
05-09-2009, 04:04 AM
#13
Burning Brakes
Thread Starter
$6.4 Billion is dollars they make per year, NOT cars. (Porsche was over $9 Billion)
I believe they sold 4.7 Million cars; anyone correct me if I am wrong.
I will now edit original post.
PS which, by the way, is very interesting: with 100,000 units versus VW 4.7 Million, Porsche
makes more money, north of $9 Billion, versus VW $6.4 Billion
05-10-2009, 12:49 AM
#14
Rennlist Member
Well, once again, the "$9 Billion" that Porsche earned last year was magic money. Porsche AG actually earned closer to $750 Million between car sales and engineering contracts. The rest was a complex stock options gambit that briefly drove the VW Group shares well north of $ $1,000 a share, for long enough to report it on their earnings statement before the VW Group shares settled way back to less than a 1/3 of that figure. Porsche HOLDING owns 51% of VW Group. Porsche AG ownes none. However, since Porsche HOLDING is now $9 Billion in short term debt, the only way for this to end and avoid Porsche AG from falling into the hands of creditors (Porsche AG would be the collateral for these loans) was for VW Group to "absorb" Porsche AG and resolve the debt from their $8 Billion cash reserves. Thus the "merger", which was really a way for the Porsche/Piech families to continue to maintain total control of both companies, without fear of banks stepping in to claim the big prize.
The control gambit proved to be suicidal for Weideking who spear-headed the stock gambit for Porsche HOLDING. He may be given a sword to fall on, as someone must pay for the failed gambit, and his last name is neither Porsche nor Piech.
It is not a shell game of simply moving cash from one pocket to another. Porsche HOLDING borrowed the money from banks in order to buy the stock. The collateral was essentially Porsche AG. The loans were based on earnings projections made more than 3 years ago, so the collapse of world banking last Fall could not have been anticipated.
In order to "save" Porsche AG, the Porsche/Piech families had to agree to rob the coffers of a very fat and profitable VW Group. Thus the "merger". And thus the cash saved for a rainy day will now be gone just when the sprinkles have started. This is serious for all parties and puts VW Group at great risk itself. With their cash reserves gone in an instant, and world car production falling, SOMEBODY high up is gonna swing.
The control gambit proved to be suicidal for Weideking who spear-headed the stock gambit for Porsche HOLDING. He may be given a sword to fall on, as someone must pay for the failed gambit, and his last name is neither Porsche nor Piech.
It is not a shell game of simply moving cash from one pocket to another. Porsche HOLDING borrowed the money from banks in order to buy the stock. The collateral was essentially Porsche AG. The loans were based on earnings projections made more than 3 years ago, so the collapse of world banking last Fall could not have been anticipated.
In order to "save" Porsche AG, the Porsche/Piech families had to agree to rob the coffers of a very fat and profitable VW Group. Thus the "merger". And thus the cash saved for a rainy day will now be gone just when the sprinkles have started. This is serious for all parties and puts VW Group at great risk itself. With their cash reserves gone in an instant, and world car production falling, SOMEBODY high up is gonna swing.
Last edited by Thundertub; 05-11-2009 at 11:42 AM.
05-11-2009, 03:16 AM
#15
Burning Brakes
Thread Starter
Well, once again, the "$9 Billion" that Porsche earned last year was magic money. Porsche AG actually earned closer to $750 Million between car sales and engineering contracts. The rest was a complex stock options gambit that briefly drove the VW Group shares well north of $ $1,000 a share, for long enough to report it on their earnings statement before the VW Group shares settled way back to less than a 1/3 of that figure. Porsche HOLDING owns 51% of VW Group. Porsche AG ownes none. However, since Porsche HOLDING is now $9 Billion in short term debt, the only way for this to end and avoid Porsche AG from falling into the hands of creditors (Porsche AG would be the collateral for these loans) was for VW Group to "absorb" Porsche AG and resolve the debt from their $8 Billion cash reserves. Thus the "merger", which was really a way for the Porsche/Piech families to continue to maintain total control of both companies, without fear of banks stepping in to claim the big prize.
The control gambit proved to be suicidal for Weideking who spear-headed the stock gambit for Porsche HOLDING. He may be given a sword to fall on, as someone must pay for the failed gambit, and his last name is neither Porsche nor Piech.
It is not a shell game of simply moving cash from one pocket to another. Porsche HOLDING borrowed the money from banks in order to buy the stock. The collateral was essentially Porsche AG. The loans were based on earnings projections made more than 3 years ago, so the collapse of world banking last Fall could not have been anticipated.
In order to "save" Porsche AG, the Porsche/Piech families had to agree to rob the coffers of a very fat and profitable VW Group. Thus the "merger". And thus the cash saved for a rainy day, will now be gone just went the sprinkles have started. This is serious for all parties and puts VW Group at great risk itself. With their cash reserves gone in an instant, and world car production falling, SOMEBODY high up is gonna swing.
The control gambit proved to be suicidal for Weideking who spear-headed the stock gambit for Porsche HOLDING. He may be given a sword to fall on, as someone must pay for the failed gambit, and his last name is neither Porsche nor Piech.
It is not a shell game of simply moving cash from one pocket to another. Porsche HOLDING borrowed the money from banks in order to buy the stock. The collateral was essentially Porsche AG. The loans were based on earnings projections made more than 3 years ago, so the collapse of world banking last Fall could not have been anticipated.
In order to "save" Porsche AG, the Porsche/Piech families had to agree to rob the coffers of a very fat and profitable VW Group. Thus the "merger". And thus the cash saved for a rainy day, will now be gone just went the sprinkles have started. This is serious for all parties and puts VW Group at great risk itself. With their cash reserves gone in an instant, and world car production falling, SOMEBODY high up is gonna swing.
Thank you for all the great info
What do you think of the impact on Porsche's quality, and direction?
Something doesn't feel .. good (for Porsche). I hope I am wrong.