Porsche's 1980s Crisis
A sharp drop in U.S. Porsche sales began in late 1987, aggravated by the biggest “crash” in Wall Street history. With its heavy reliance on the U.S. market, Porsche’s fortunes depended more than those of most automakers on the health of the dollar. When the stock market plunged, the DMark soared, which only worsened the price pressure on all Porsche products. That and more aggressive sports-car competition explains why the firm’s total U.S. sales plunged about 50 percent in just two years, dropping from an all-time high of 30,000-plus in calendar 1986 to under 16,000 by the end of ’88.
There were problems in the executive ranks, too, and they’re worth mentioning here. First, in late 1988, the Porsche board summarily dismissed wunderkind chairman Peter Schutz, some say because he clashed once too often with the Porsche and Piech families. But in his stead came Heinz Branitzki, a finance man who angered many old hands in Zuffenhausen by forcing longtime chief engineer Helmut Bott to take early retirement. Worse, Bott’s hand-picked successor, Ulrich Bez, stirred up more ill feeling with a heavy-handed reorganization of the Weissach Development Center.
Bez also decreed several costly new programs that threatened to trigger a cash crisis. Among these were another low-priced VW-based sportster, Project 995; a 959 successor, called 965, which was far more involved than the 911 Carrera 4 ultimately offered; and -- talk about heresy -- a V-8 four-door “sedan,” Project 989, which would have to sell for no less than $93,000 to turn a profit. Meantime, sales kept falling, thanks partly to a stubborn U.S. recession. Porsche soon became the subject of takeover rumors, with Daimler-Benz most often mentioned as savior.
Even the strong-selling 944 line couldn't keep Porsche ahead of financial trouble.
Fortunately for Porsche and its partisans, saner heads ultimately prevailed. Branitzki retired after only about a year, and Bez was soon fired. New chairman Arno Bohn was no more a “car guy” than Branitzski, but he could read a ledger, and he soon ended the spendthrift programs championed by Bez while seeking ways to “right size” the company for the vastly changed sales situation. Though more disagreements with the two “ruling families” forced Bohn to resign in mid-1992, his replacement was a good one: engineer and former production boss Wendelin Wiedeking. By that time, Horst Marchart, a 20-year Porsche veteran also well liked in Zuffenhausen, was in charge of product development. Within two years, this new regime had trimmed the corporate payroll by about a third (from some 9,000 workers to around 6,600) and had started charting a new model course to take Porsche profitably into the 21st century while allowing it to remain proudly independent.
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