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Porsche buy launches VW drive for world domination

Volkswagen's triumphant bid to take over luxury German carmaker Porsche marks the end of a bitter family power struggle and the start of a drive to become the world's top auto manufacturer.

Porsche buy launches VW drive for world domination
Photo: DPA

“VW and Porsche are entering a new era — the company has the means to become number one,” pipping Japan’s Toyota by 2018, chief executive Martin Winterkorn said Friday at company headquarters in Wolfsburg, northern Germany.

Volkswagen, already Europe’s biggest automaker, and Porsche, maker of the legendary 911 sports car, agreed to a tie-up late Thursday after nearly four years of brinkmanship and infighting.

The full acquisition, which will also entail the Gulf state of Qatar taking a stake in Porsche and which VW estimates will produce €3 billion ($4 billion) in synergies, should be complete by 2011.

It closes an ugly chapter in the history of Germany’s illustrious auto sector that began in late 2005, when two of the industry’s biggest names crossed swords in a duel for control of the empire.

In the beginning, it was Porsche that sought to buy VW in a bid to drive down the average carbon dioxide emissions of its fleet before new European anti-pollution legislation comes into effect in 2012.

VW’s efficient Polo and Skoda models were to offset Porsche’s greenhouse-gas-spewing muscle cars.

Porsche, which already uses VW assembly lines, also aimed to protect its powerful but insular partner against potential foreign investors.

The Stuttgart-based manufacturer tried to acquire 75 percent of the shares in VW but the attempt backfired in May against the backdrop of the financial crisis, which hit the auto market hard and produced a crippling credit crunch.

Porsche, with just 12,000 employees compared to VW’s 360,000 staff, ended up €9 billion in debt as it built up a controlling stake in VW.

That burden ultimately weakened its own position and the red ink will continue to hurt the company in this fiscal year.

Meanwhile powerful trade union IG Metall and the works council at Volkswagen fought the takeover by Porsche tooth-and-nail.

Hard-charging Porsche chief executive Wendelin Wiedeking inflamed tempers when he said he would go after the “sacred cows” at Volkswagen, where labour has a strong say in the company’s management.

Wiedeking’s bold attempt to take over the much bigger VW also made an enemy of Ferdinand Piech, the fearsome 72-year-old chairman of VW’s supervisory board and a scion of the Porsche clan who holds a major stake in the company.

Piech emerged top dog from a nasty months-long scrap with Wiedeking and Piech’s cousin Wolfgang Porsche, another major Porsche shareholder who had backed the VW takeover bid.

Wiedeking was forced to resign, and Porsche is now to become just one brand in VW’s sprawling stable which also includes Audi, Bentley, Bugatti, Lamborghini, Seat, Scania, and Skoda.

Analysts warned that although the giant company would likely benefit from synergies in the long-run, it could pose a few immediate problems for VW as the economic crisis rages on.

“One problem I see is that too much of the liquidity that Volkswagen still has will be spent on the deal,” an automobile industry expert at the University of Applied Science Bergisch-Gladbach, Stefan Bratzel, told the daily Berliner Zeitung.

He said VW needed the cash in the next two years for pressing concerns.

“In that time, VW will have quite a few expenses that we do not know about now. In addition, the group needs to invest heavily in future technology,” he said.

Nevertheless, he added, “VW has a strategic size that is extremely important in global competition. That is why I see the future of the company very optimistically.”

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WORKING IN GERMANY

Which Bavaria-based companies regularly hire English speakers?

Bavaria is no doubt a beautiful state with a strong economy, but can be a hard place for non-German speakers to integrate. The Local takes a look at job opportunities in Germany’s southeastern 'Free State.'

Which Bavaria-based companies regularly hire English speakers?

Munich ranks third in German cities with the highest total GDP, behind Berlin and Hamburg, but in terms of GDP per capita, it’s higher than both of them.

It also consistently ranks high, often highest, in terms of average household income.

As of 2023, nine of the 40 companies listed on DAX, Germany’s stock index, were based in Bavaria. Seven of those are based specifically in Munich.

While Frankfurt is commonly known to be Germany’s business capital, Munich can claim the title of Germany’s insurance capital, which is saying something, as Germany is home to some of the largest insurance firms in the world, like Allianz.

Beyond the state’s capital city, a number of international companies are based elsewhere in Bavaria, particularly in the Franken region, near Nuremberg.

Which companies actively hire English speakers?

Bavaria, and Munich in particular, is home to a number of companies at the forefront of international business. But the state is known for its traditional, sometimes conservative, culture, which affects its business culture as well.

Whereas companies embracing English as their primary business language are easy to find in Berlin, the practice is less common in the south. That said, there are some notable exceptions. 

Sportswear giants, Adidas and Puma, both have their headquarters near Nuremberg in Herzogenaurach, and regularly recruit English speaking international talent.

“As an international company, our teams reflect the rich diversity of our consumers and communities,” Jon Greenhalgh, Senior Manager Media Relations for Adidas told The Local. “Fostering a culture of inclusion where we value and leverage differences, ensures that we can authentically engage with our employees and truly connect with our consumers.”

He added that around 40 per cent of Adidas’ Germany-based employees are foreign nationals, from over 100 different countries.

Siemens and BMW rank among Bavaria’s top employers, and are also known to hire their fair share of foreigners.

“In Germany, we recently had around 2,000 open positions,” Konstanze Somborn told The Local on behalf of Siemens AG.

He added that Siemens operates in 190 countries. “That is why we value international teams very much…English as a common language is very usual.”

READ ALSO: ‘Which German companies want to hire foreigners?’

Similarly, BMW hires workers from a variety of backgrounds. 

“Every year, we hire lots of internationals and welcome them to the BMW Group,” Dr. Hans-Peter Ketterl, a press spokesman for BMW Group told The Local. 

But not all of these positions are available to non-German speakers.

Ketterl added that BMW’s working language is German in the country, even though, “English is an indispensable entry requirement as the second corporate language in many areas of the company.”

Check job boards and follow best practices

If it’s your first time applying for jobs in Germany, make sure to change your resume to the German format, even for English positions.

While Germany is home to its own job boards, like Xing, LinkedIn is probably the best place to start. In addition to searching for positions based in your preferred location, you can check relevant groups, like Munich Startups, to broaden your horizons.

The English Jobs in Germany website is also a good resource to start with. 

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