Meeting in Austria, families behind Porsche discussing luxury auto maker, Volkswagen

Piech, Porsche families meet in Austria

SALZBURG, Austria — The families that control Porsche meet Wednesday to decide if the automaker should sell Porsche to Volkswagen or even merge the two German automakers.

Members of the Piech and Porsche families, the controlling share holders of Porsche Automobil Holding SE are meeting privately in Austria, but neither company has said what the talks are focusing on.

Hermann Becker, a Porsche SE spokesman, declined to comment on the meeting, but a person familiar with the families confirmed it was taking place at an undisclosed location in Salzburg.

Media in Germany have recently reported that Porsche is experiencing financial difficulties stemming from its efforts to increase its stake in Volkswagen and falling car sales from the world economic crisis.

Porsche is currently Volkswagen’s largest shareholder with 51 percent and it’s said it wants to raise that stake to 75 percent but that it probably wouldn’t be possible this year given the state of the economy.

At Volkswagen’s annual general meeting April 23, chief executive Martin Winterkorn said “I’m certain that we can and will advance our partnership in the difficult current year 2009,” but wasn’t more specific.

Winterkorn said the two companies together “have the stuff to develop the powerhouse of the international automobile industry.”

German media have speculated the key topic will be how to combine the two companies as Porsche looks to reduce euro9 billion in debt it took on to gain control of Wolfsburg-based Volkswagen AG, Europe’s biggest automaker by sales.

Porsche recently secured financing for euro10 billion from a number of banks, and is reportedly seeking a further euro2.5 billion in financing.

Porsche Chief Executive Wendelin Wiedeking and Volkswagen supervisory board chief Ferdinand Piech are expected to discuss the options for the two companies, media reports said.

Piech, who owns about 10 percent of Porsche, is the grandson of Ferdinand Porsche, the founder of Porsche.

A supervisory board is the German equivalent of a U.S. board of directors.

The talks come even after Qatar acknowledged it was in discussions about the possibility of buying a stake in Porsche, too.

Sheik Hamad bin Jassem Al Thani was quoted last month by the country’s Al-Arab newspaper as saying that discussions and meetings are ongoing with the luxury sports car maker, but no decision had been reached.

On the Net:

www.volkswagen.com

www.porsche.com