At the morgue
SEPTEMBER 30, 2005
The Morgue is a vault in SIS Headquarters where all the old case files are stored. This is presided over by a rather creepy individual named Schmutzli, who scares the Penelopes on a regular basis when they are doing research work. The Mole, perplexed by goings-on in Germany, was down in The Morgue, pulling out files on the Porsche Family. The Porsche company has just announced plans to buy 20% of the giant automobile firm Volkswagen and alarm bells had started to sound. The Mole wanted to investigate.
The Morgue is one of those places where one does not feel odd, talking to one self, if only, perhaps, to stop being frightened of Schmutzli's chicken-strangler eyes.
"So," The Mole said aloud to himself. "Porsche builds 88,000 cars a year compared to VW's five million. And it has sales of $7.7bn compared to VW's, um, $120bn. Blimey! That's a difference."
The profit figures were more interesting, however, with Porsche making $293m and VW only $923m.
"So Volkswagen builds 55 times as many cars as Porsche and makes only three times the profit. Hmm. Not very impressive."
The Mole did not for one minute believe the Porsche explanation for why it was buying Volkswagen shares and had concluded even before he finished reading the despatch from Stuttgart that it was all do to with the family. The Porsches are a proud lot and clever too. So clever in fact that the current chairman of Volkswagen is a member of the Porsche family. Ferdinand Piech is the grandson of Ferdinand Porsche, the man who originally went to Adolf Hitler with the idea of building cars for the people. Hitler liked the idea of a "Volks Wagen" and the first Porsche-designed VW appeared at the Berlin Motor Show in 1936. It never made it into production because of the war and afterwards Porsche and his son-in-law Anton Piech were thrown in jail by the French for having worked for the Nazis. Porsche's son Ferry and his daughter Louise (Piech's wife) started a small factory in Gmund in Austria and built the Cisitalia Grand Prix car in order to raise the cash needed to buy their father's freedom. Once that was achieved they decided to start building sports cars as they were no longer welcome in the post-war Volkswagen company.
But in 1949 Volkswagen chairman Heinz Nordhoff did something blindingly obvious and asked the Porsches to help him develop the original Volks Wagen design. The result was the VW Beetle. As part of the deal the Porsches negotiated a royalty on every single car sold and as VW would sell 21,529,464 of them in the course of the next 55 years the family did pretty well out of the deal, not to mention also gaining the VW concession for Austria, a tidy little business in its own right. The money produced helped the Porsche family to expand their own car-making business, and in the early 1960s Ferdinand Alexander Porsche (Ferry's son) styled the all-important 911 which made the company so successful that by 1972 it was floated on the stock exchange, although the family still owns 76% of the firm, while also diversifying into real estate, watches, luggage, tennis rackets and, of course, the Austrian car dealerships.
"But obviously that is not enough," said The Mole to himself. "The family seems to believe that VW owes everything to Porsche and want one day for that to be reflected in reality."
The purchase of 20% of the Volkswagen company comes at a time when Volkswagen is about to lose the support of the German state of Lower Saxony, which is being forced to sell its 18% share by the European Union. If Porsche buys that share it will have 38% of the business and aqs Volkswagen owns 13% of its own shares would then be in a position to control VW. And that would mean that one day, perhaps quite soon, Volkswagen could become a subsidiary of Porsche.
The Mole smiled.
It was a good plan and a better brand as well. Porsche is all about great engineering and design. Volkswagen is just about crunching out cars. A sprinkling of Porsche magic on the Volkswagen company would create a serious rival to Mercedes-Benz and BMW, as their markets would inevitably soon be overlapping. And that would give Porsche the incentive to take them on in the spotlight and beat them.
"And where would they do that?" muttered The Mole.
Formula 1 was the only answer. And The Mole could not help but think that for Porsche, there is an element of unfinished business in Formula 1 as well. People may have forgotten that it was Porsche which built the amazingly successful TAG turbo engines of the 1980s for McLaren. There may even be some people who have forgotten the horrible disaster that occurred when Porsche built its own V12 Formula 1 engine in 1990 and did a deal for Arrows to use it. But you can bet that the Porsche Family has not forgotten that humiliation.
"It is unfinished business," said The Mole.
Just as Porsche wants to control of Volkswagen, so Porsche will one day want to be back in F1, thought The Mole, if only to set the record straight.
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