Personnel Blume's Time at Porsche Is Over

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The Porsche Supervisory Board is holding a special meeting to discuss a successor to Oliver Blume. One name is already being discussed.

Oliver Blume is to be replaced as Chairman of the Executive Board of sports car manufacturer Porsche. The Executive Committee of the Supervisory Board has instructed the Chairman of the Supervisory Board to hold talks with him about an amicable early departure from the Executive Board, as the company announced in Stuttgart. A possible date was not specified. Blume will remain head of VW, it said. This Friday afternoon (October 17), the Porsche Supervisory Board is to discuss the personnel matter in a meeting convened at short notice.

According to the company, former McLaren boss Michael Leiters is available as a possible successor. Negotiations are currently underway with him. Leiters, who holds a doctorate in mechanical engineering, previously worked at Porsche for 13 years and at Ferrari before joining McLaren.

Blume's Role Dubbed "Part-Time CEO"

If the dismissal is confirmed, a rather unique constellation in the German corporate landscape will come to an end: the 57-year-old Blume has led two listed companies for around three years. Ten years ago - in October 2015 - he became Chairman of the Executive Board of Porsche. On September 1, 2022 - shortly before the Porsche IPO - he took over as CEO of the parent company Volkswagen.

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There had been speculation about the withdrawal for some time. Shareholder representatives have long been critical of Blume's dual role. Not only because of the huge workload, but also because of possible conflicts of interest. They repeatedly called on the top manager to opt for the management of one of the groups. Hendrik Schmidt from fund provider DWS, for example, criticized the fact that Porsche and VW were the only listed companies in Germany to have a "part-time CEO". In view of the tasks at both companies, the trade unions and works council also felt that the time had come to separate the positions again in terms of personnel.

Blume let such accusations bounce off him. Even if the tone has changed in recent months: he defended his dual role to the end as a recipe for success with more advantages than disadvantages. For a long time, support came from the billionaire Porsche and Piëch families, who control the majority of voting rights in the Volkswagen Group. But what does the top manager's track record look like - and what construction sites will he leave behind for his successor?

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What Blume has Achieved at Porsche

Blume took over Porsche in top condition. Up to this point, 2015 had been the most successful financial year in the company's history. At his first annual press conference, the manager spoke of an "extraordinary result, even by Porsche standards". That was already a foretaste of everything that was to follow.

For years, things went almost exclusively upwards in Zuffenhausen - with sales figures, turnover and profits. When Blume took office, Porsche was selling around 225,000 cars a year. In 2023, the year with the highest sales to date, it was a good 320,000 sports and off-road vehicles. Profit after tax has more than doubled during his time in office.

One of Blume's greatest successes: the IPO in September 2022. After years of speculation and months of scrutiny, Volkswagen raised almost 9.4 billion euros with the IPO. This made it the largest initial public offering in Germany since Deutsche Telekom in 1996, even though the economic conditions were anything but rosy due to the consequences of coronavirus and the war in Ukraine.

The stock with the abbreviation "P911" - named after the iconic 911 sports car - then soared. In December 2022, the company was already included in the leading Dax index. This made Porsche "happy and proud", said Blume at the time. In the meantime, Porsche was also worth more on the stock market than its parent company VW. The shares reached a high of almost 120 euros in spring 2022 - after an issue price of 82.50 euros.

The Construction Sites of the Blume Era

Despite the good run, the problems piled up, particularly in the home stretch of the Blume era, which lasted almost ten years. Sales figures left a lot to be desired - especially in China and the USA. And profits also plummeted recently. Group net profit from January to June amounted to 718 million euros - 71 percent less than a year earlier.

The once successful sports car manufacturer has become a company in crisis mode. This has not gone unnoticed on the stock market: the value of the share has more than halved since its peak. Most recently, the value fluctuated around 41 euros. At the beginning of September, Porsche was also kicked out of the DAX.

In a letter to the workforce in the summer, Blume outlined several reasons for the misery: In China, the market segment for expensive luxury products had literally collapsed in a short space of time. In the USA, the increased tariffs and, in particular, the current development of the US dollar put pressure on Porsche's business. Problems for which his successor will have to find solutions.

From E-Cars Back to Combustion Engines

In addition, the turnaround to electric cars is not working: No other brand in the VW Group had set itself a similarly ambitious target. More than 80 percent of all new Porsche cars were to be fully electric by 2030. There is not much left of that. In the first half of the year, the proportion of fully electric cars was 23.5 percent. E-mobility is developing much more slowly in many markets than "we and many experts had expected years ago", says Blume.

As a result, the Zuffenhausen-based company has changed tack - it now wants to develop more vehicles with combustion engines and plug-in hybrids again. There is also little left of the management's once grand battery plans. In future, the battery subsidiary Cellforce will only be involved in research and development, and up to 200 jobs are to be lost there. Porsche is expecting the move to cost billions more.

The car manufacturer must therefore cut back - and shrink its structures. By 2029, around 1,900 jobs are to be cut in the Stuttgart region in a socially responsible manner. A further savings program is to be put together in the autumn. This is currently being negotiated with the works council.

These Are the Biggest Tasks at VW

Even if Blume can concentrate fully on VW: He is also likely to keep an eye on the problems at Porsche from Wolfsburg. This is because the weak performance of the former profit giants Porsche and Audi has recently weighed on the Group. In the second quarter, the long-weakening core brand actually generated more operating profit than the premium brands combined.

Even after the end of the wage dispute with IG Metall, there are still plenty of unresolved issues within the Group: Negotiations must now be held with IG Metall until the end of 2026 on a change to the wage structure, which VW hopes will lead to further savings. And the core brand plans to cut almost one in four jobs in Germany by 2030. The Group must now show how this can be achieved without a single redundancy.

VW wants to reduce overcapacities and increase the profit margin of the low-profit core brand with the austerity measures. Blume cannot hope for much support from the employees: Resentment had grown during the crisis. Added to this are the Group's permanent construction sites: the collapsing business in China, the sluggish electric ramp-up, the Group's own software company Cariad, the construction of its own battery factories and the race for autonomous driving.