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"In making this investment, we seek to secure our plans for the future

on a long-term footing."

Wiedeking's defense of the VW investment as quoted in this month's

christophorus.

Any good businessmen out there want to comment on this strategy?

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"In making this investment, we seek to secure our plans for the future

on a long-term footing."

Wiedeking's defense of the VW investment as quoted in this month's

christophorus.

Any good businessmen out there want to comment on this strategy?

Family connections aside I believe from what the article I read indicated that Porsche was afraid because of VWs financial condition, they might be bought out and might reduce the amount of parts that Porsche purchases from VW. It certainly sounds logical, but there is ALWAYS a story behind the story.

We'll know as events unfold...

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"In making this investment, we seek to secure our plans for the future

on a long-term footing."

Wiedeking's defense of the VW investment as quoted in this month's

christophorus.

Any good businessmen out there want to comment on this strategy?

There are any number of good reasons why Porsche's investment in VW makes sense, none of which are communicated by this statement. Its sole purpose is to not give a reason. Smart move--Wiedeking's defense provides no target for media spin, and speculation can instead only focus on extrapolations of fact. This is much like what Alan Greenspan does, waxing drivel to the public and leaving his policies and near-term decisions a mystery to the media. This investment isn't earth-shattering, nor is it so risky as to leave Porsche in an unrecoverable position should VW ultimately fail.

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I almost feel like a troll. Ok, my thoughts.

Looking at P:

The supply line is with a company that obtains stiffness with weight rather than design. Others do better - witness Audi's desire to base the A8 on the Quattroporte platform.

Other than the platform, P can source switches, trim and the like from just about anyone, likely at better prices and with superior look and feel.

P has a very effective outsourcing program. It gives them substantial flexibility. Some of this flexibility will be lost. Especially if they have to pour volume into VW's overbloated capacity.

Where are the connections: The Cayenne - king of the hill in a dying SUV class. The Panorama - aimed at a small market niche dominated by AMG MB's and M5's with sales driven by bragging rights as opposed to a pretty face and creature comforts. Another Quattroporte? - only this time Fiat/Ferrari is not going to give VW the platform they want from them.

Looking at VW:

Highly political with its ties to the Bavarian state - a "quasi" social institution with guaranteed sources of funding.

Negative cash flow since at least 2002. Lest we not forget the EU is forcing the Bavarian state to separate itself from direct and indirect support of VW.

Strong labor unions.

Ethics and financial reporting are (best case) questionable.

New product line already introduced at a time when Renault and Peugeot/Citroen are strengthening and just now revamping their entire product line, the Fiat Panda captured 35% of its market segment in its first year on the market and Fiat is also revamping its entire product line. As we split our time between Europe and the U.S., it is unmistakably evident that the slope of acceptance of Japanese brands has increased dramatically during the past 4 or 5 years.

At the upper end, BMW shot itself in the foot with its styling -- doubtful they will make this mistake again. The Phaeton, Bugatti, Lambo and Bentley are at best PR distractions and at worst sinkholes for money. Lexus and Infiniti (Renault) are coming.

My view: Good luck P but I'm not too pleased with the fact the premium I pay for these cars was used this way. And I wonder where all the management and technical resources are that will turn around VW? Can't call Toyota this time.

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I almost feel like a troll. Ok, my thoughts.

Looking at P:

The supply line is with a company that obtains stiffness with weight rather than design. Others do better - witness Audi's desire to base the A8 on the Quattroporte platform.

Other than the platform, P can source switches, trim and the like from just about anyone, likely at better prices and with superior look and feel.

P has a very effective outsourcing program. It gives them substantial flexibility. Some of this flexibility will be lost. Especially if they have to pour volume into VW's overbloated capacity.

Where are the connections: The Cayenne - king of the hill in a dying SUV class. The Panorama - aimed at a small market niche dominated by AMG MB's and M5's with sales driven by bragging rights as opposed to a pretty face and creature comforts. Another Quattroporte? - only this time Fiat/Ferrari is not going to give VW the platform they want from them.

Looking at VW:

Highly political with its ties to the Bavarian state - a "quasi" social institution with guaranteed sources of funding.

Negative cash flow since at least 2002. Lest we not forget the EU is forcing the Bavarian state to separate itself from direct and indirect support of VW.

Strong labor unions.

Ethics and financial reporting are (best case) questionable.

New product line already introduced at a time when Renault and Peugeot/Citroen are strengthening and just now revamping their entire product line, the Fiat Panda captured 35% of its market segment in its first year on the market and Fiat is also revamping its entire product line. As we split our time between Europe and the U.S., it is unmistakably evident that the slope of acceptance of Japanese brands has increased dramatically during the past 4 or 5 years.

At the upper end, BMW shot itself in the foot with its styling -- doubtful they will make this mistake again. The Phaeton, Bugatti, Lambo and Bentley are at best PR distractions and at worst sinkholes for money. Lexus and Infiniti (Renault) are coming.

My view: Good luck P but I'm not too pleased with the fact the premium I pay for these cars was used this way. And I wonder where all the management and technical resources are that will turn around VW? Can't call Toyota this time.

I don't even pretend to know what's going on, but I sure would like to be on the inside of this one. Call Karl Ludvigsen! :)

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