Forget Jack Baruth and his girlie Boxster. The whole Porsche company is quickly skidding out of control. Porsche, the company that supposedly has more money than Scrooge McDuck, the company where CEO Wendelin Wiedeking and his CFO Holger Härter supposedly take a daily dive into the money, was—hold on to anything stable—facing insolvency two months ago. This is what readers of the German magazine Der Spiegel will read on Monday. The Süddeutsche Zeitung has an advance copy.
According to the report, Porsche was out of funds between March 22 and March 24, 2009. An insolvency could only be averted, because Volkswagen graciously handed them a €700 million loan. Yes, the same Volkswagen Porsche was buying. That loan only had a term of six months. Porsche was then able to secure a €10 billion bank loan, but had to put the crown jewels of the Porsche family in hock. This triggered a family feud, and an offer from Volkswagen to take Porsche over instead, lovingly documented in the annals of TTAC. Now it turns out that the €10b loan was used to pay off a previous €10b loan – Porsche turns more and more into a dead beat that uses a credit card to pay of another credit card balance.
Porsche needs more money. Currently, another €2.5 billion are considered necessary. Porsche is in “a critical situation,” Wendelin Wiedeking told his supervisory board. Also, Wiedeking should talk to CFO Holger Härter more. Wiedeking told the baffled board that he “had not been informed about the precarious situation until a week before March 24.”
Instead of wallowing in money, Porsche is looking at a debt load of €9 billion. Talks about a merger of Porsche and Volkswagen were broken off last week, and then re-started, but the revived talks lack the necessary spirit and urgency. The obvious leak to Der Spiegel could re-focus the attention. And/or humiliate Wiedeking even more.
So the news about Porsche being one of the few (or one of the only) car companies not facing multibillion dollar losses is… not… true?
Somebody pinch me. All is finally right with the world.
Die Porsche Die
Get those ass backwards, deadly missles driven by maniacs, the hell off the road
Actually around here most are driven rarely, by old guys like myself, that never use the right pedal as intended.
What Juniper said.
No skin off my back. In any case, if they are wildly profitable and then gamble like crazy … well, in another era, it was called bankruptcy.
You can use the right pedal as intended. You just need to forget the top two or three gears exist.
Question: when was the last time you saw a ‘Vette or Porker pulled over by a cop? Drivers of each are likely to be quite ‘mature’, Baruth excepted.
Does this mean Porsche automobiles might be on sale in some areas right now? Every day as I drive to work in the western metro Milwaukee area I see 2-5 new Porsche coupes (usually piloted by mature drivers who understand how to handle the baseball-bat), and wonder how everyone can afford them.
chuckR: You’re right. It’s like Harley riders. If you see a kid on one it’s almost striking.
Looks like the Porsche had flew a bit too close to the Sun, just like Icarus been.
Wonder what is going to be unfold now.
And VeeDub doesnt want the walk to altar no more as the groom is not a deep pocket as it used to be, kind of need money to pay for the limo driver first before ve can pick up u honey.
So how universal truth is No money no funny honey.
Live by the financial sword, die by the sword.
My bet is that there is an Enron sized scandal behind this whole situation. Whether or not it will see the light of day is anyone’s guess. Will the Germans air the dirty laundry?
Porsche is a victim of the credit crunch. They had to refinance their old debt, which wouldn’t have been a problem one year ago, but now the banks refused them…bad timing to swallow a much bigger carmaker I say
A powerful German got grabby, bit off more than he could chew, and lost. Where have I seen this before?
This is what happens when a company has profits in excess of sales two years running, and tries to go for both the hat-trick and the brass-ring simultaneously.
Also what happens when the EU is unable to drive a stake thru the heart of the very anti-competitive and protectionist VW-Law.
Bankruptcy eh? I’ve always wanted to own a Porsche. Maybe this is my chance to just own Porsche?
This deserves a big ol’ FUBAR and a shout out to our old friend SNAFU
A powerful German got grabby, bit off more than he could chew, and lost. Where have I seen this before?
+1
And I thought that most Porsche buyers paid cash.
So, Porsche is just like all the other auto makers and having trouble in very troubling times. I do not think this is strange. Or reason for glee. Its just the way things are. Not a great environment for car makers at the moment. The trick is to survive until things get better. It is how Porsche, and the other manufacturers, do this that is the important part and what is worth tracking.
pax, smn
With their product lineup and intended audience demographics- this is going to get worse for Porsche.
AutoTrader shows 695 911’s for sale within 100 miles my zip San Diego. Amazing number by owners. Usual is lots of dealer cars then By Owner. Leased or loan and can’t make the payments.
Both Porsche, VW and the German gov are in dire straits. Will Merkel do an Obama?
bridge2far has it right – the target market for Porsche will fare badly over the intermediate term, as higher income wage earners see increases in tax loads, the economy continues to worsen (everywhere) and there simply are fewer people willing or able to spring for a mid-life crisis toy in troubled economic times, and practicality trumps frivolity in the new world we see shaping up.
I’d rather own a Hyundai or Kia dealership now than a Porsche one.
Did you hear the story of how hundreds of former mortgage brokers turned their cars back into the busiest Porsche dealership in Ventura, California, sometimes leaving the cars with keys in the ignition or under the floor mats on the dealer lot late at night, after the subprime mortgage meltdown (Ventura was the ‘boiler room’ of subprime mortgage companies)?
It’s true.
The history of Porsche is as follows: (i) make a great 2 seater (+) sports car, (ii) sell a ton of them, generate $$, (iii) use those $$ to build and market other cars that bomb, waste all the $$ generated in (ii) above; (iv) get close to bankruptcy and cut everything except the great 2 seater, which you improve markedly in a last ditch attempt at survival; then . . . repeat.
No…
that’s
i – make a great sportscar
ii – make more of the same
iii – bored of this, make better sportscars, which the public will ignore, since Porsche = 911, no ifs, no buts.
iv – improve 911. Make more of the same.
v- approach death and despair while selling only one profitable product.
vi – make a profitable 2 seater that looks almost like a 911.
vii – it’s still not a 911. Still not a Porsche.
viii – it saves the company.
ix – Porsche realizes its “faithful” are idiots, anyway… c’mon, here we’ve developed several good sportscars and they hated them… right? So it makes an SUV.
x – $$$$$$$$$$$$$
They’d make a great match with Fiat.
OK lets move ahead 6 1/2 years. I’m now driving my 2017 Carrera 4 and it is one fabulous car. Super cars have arrived big time and Porsche not actually a super car still sells more than the rest combined or maybe not. When I was young I drove a 1975 914, granted it got sneered at by the 911 crowd and later a 924, granted that was a bad build, but I am still glad to be around to enjoy the experience.