Volkswagen is set to renew its chief executive’s contract beyond next year, highlighting how Martin Winterkorn has become a linchpin in the German carmaker’s quest to overtake Japanese rival Toyota by 2018.
Europe’s largest carmaker plans to extend Mr Winterkorn’s five-year contract by another three years either at a supervisory board meeting in November or in February at the latest, a VW executive told the Financial Times.
“It would be unusual to give a chief executive of his age another five-year contract so the plan is to go for three years,” the executive added, while VW declined to comment officially.
Mr Winterkorn will be 64 when his contract expires at the end of next year.
The planned renewal demonstrates how Mr Winterkorn in the past four years has successfully managed the web of vested political and labour interests at one of Germany’s largest industrial groups.
The former head of the group’s premium brand Audi is a close confidant of Ferdinand Pi??ch, VW’s patriarchal chairman and its true strategic head.
But another important relationship is that Mr Winterkorn has the backing of the works council, which is considered the most powerful council of all German blue-chip companies.
Bernd Osterloh, VW’s works council leader who played a big part in the ousting of Mr Winterkorn’s predecessor in 2006, displayed his full support for the chief executive at a rally at the group’s Wolfsburg headquarters.
“Our chief executive has advanced the company in every respect,” said Mr Osterloh, who is also deputy head of VW’s supervisory board.
He added that Mr Winterkorn’s achievements included the modernisation of the plants and a broadening of the product portfolio at the carmaker, which owns a stable of brands ranging from VW and Skoda to Lamborghini and Bentley.
Analysts concede that Mr Winterkorn, an engineer at heart who prefers spending his time test-driving and debating technical minutiae to talking to investors, has done a decent job in dragging VW out of its deep crisis a few years ago. In the past year, at a time when many rivals were making large losses, VW raked in a €911m ($1.2bn) profit.
“There is no reason to believe that Mr Winterkorn has made a bad job on the operative side,” said Arndt Ellinghorst, head of automotive research at Credit Suisse. “On the strategic side we don’t know. Future will tell,” he added.
Mr Winterkorn will face multiple challenges in the coming years, when VW aims to merge with sports car maker Porsche while also chasing Toyota as global market leader by sales.
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