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Old 11-06-2014, 05:30 AM   #1
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Porsche: The Hedge Fund that Also Made Cars

http://priceonomics.com/porsche-the-hedge-fund-that-also-made-cars/

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Old 11-06-2014, 08:09 AM   #2
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As an addendum, both former Porsche execs Wiedeking and Harter are facing criminal charges for concealing their efforts to take over Volkswagen.

Seems that when people lose $7.85 billion, they get a little pissed.

Just sayin'..............

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Old 11-06-2014, 09:22 AM   #3
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Wiedeking should have made more friends with his fancy cars on the way up, namely Carlos Slim. A billion dollars to cut out Piech when the audacious plan went sour?
Pffftt... Slim could have written that check and paid off of the rest of the loan too without Porsche needing to run to Qatar. Slim must be a Bimmer guy.
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Old 11-06-2014, 02:22 PM   #4
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I've wanted a well put together article on the topic for a long time, thanks for sharing.
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Old 11-06-2014, 02:33 PM   #5
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The next time someone asks why M96 engines fail, here's the answer.. Quoted right out of the article:
Quote:
assembly time per vehicle went from 120 hours to 72 hours,
Hell, it takes us longer than 72 hours just to build an M96 engine!
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Old 11-06-2014, 03:37 PM   #6
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What I want to know is who is the guy that suggested to Wiedeking & Co to use the cash-settled options across the six banks?
Probably the same guy in black who convinced everyone, well nearly everyone, that a triple A rated security couldn't actually lose half its value being that it was errr... tied to houses.
Had they done this just one year earlier, man... Wiedeking would be German PM.
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Old 11-06-2014, 03:59 PM   #7
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All I can say is "WOW"

I bet the small stories could fill volumes of what transpired at middle level and upper management.
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Old 11-06-2014, 04:00 PM   #8
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"Hell, it takes us longer than 72 hours just to build an M96 engine! "



The difference being Jake, is that your team build your engines with pride & professionalism, while Porsche built the engines purely on a financial basis. There's a big difference.

It would have been interesting to be a fly on the wall at the factory M96 design briefings, just to see how much the accounts department bean counters held sway over the engineering design team....
In my own experience, the accountant's see every cent saved in Design & Engineering as a potential win for the companies bottom line, with scant regard as to what happens a couple of years later when the product is released on the open market.
In over 40 years in industry, I've never once met a corporate accountant that was sympathetic to engineering excellence.
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Old 11-06-2014, 05:25 PM   #9
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Go to YouTube and search for the series "made by hand".

You'll see what built the brand, and then the hedge fund article will even piss you off even more.

Anyone note what the average profit per car was in the article? I have nothing against profit, BUT that figure could pretty easily be used in an equation to see just how much it cost to build each car....
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Old 11-06-2014, 05:30 PM   #10
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Quote:
Originally Posted by Jake Raby View Post
Go to YouTube and search for the series "made by hand".



You'll see what built the brand, and then the hedge fund article will even piss you off even more.



Anyone note what the average profit per car was in the article? I have nothing against profit, BUT that figure could pretty easily be used in an equation to see just how much it cost to build each car....

Build quality aside, I see that a large amount of that profit comes from the overpriced options, I see that as the real bread and butter of their strategy.
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Old 11-06-2014, 05:43 PM   #11
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Fantastic article. I think, as Porsche fans, anger is an easy response to that article But when I consider the actual products that Porsche has put out over Wiedeking's tenure and in the few years that have followed, I find it hard to get too worked up about it. At the end of the day, Porsche is still a strong brand with a secure future that- and this the most important part- still builds excellent automobiles. Wiedeking may have put the brand in danger, but he also saved it from the brink. Without him, Porsche may have ceased to exist and this forum's namesake would have probably never existed.

The financial stuff is non-issue to me. I see "investing" as a more conservative form of gambling. You have no guarantees and if someone plays that game better than you and you lose out, you should have no one to blame but yourself.
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Old 11-06-2014, 06:22 PM   #12
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Originally Posted by ep3_lol View Post
Fantastic article. I think, as Porsche fans, anger is an easy response to that article But when I consider the actual products that Porsche has put out over Wiedeking's tenure and in the few years that have followed, I find it hard to get too worked up about it. At the end of the day, Porsche is still a strong brand with a secure future that- and this the most important part- still builds excellent automobiles. Wiedeking may have put the brand in danger, but he also saved it from the brink. Without him, Porsche may have ceased to exist and this forum's namesake would have probably never existed.

The financial stuff is non-issue to me. I see "investing" as a more conservative form of gambling. You have no guarantees and if someone plays that game better than you and you lose out, you should have no one to blame but yourself.

I agree, both wiedeking and pich have seriously admirable approaches to buisness, and I don't see wiedeking as taking a cheap approach to building cars, I see it more as a smart approach, it is amazing what quality used to go into porsches, but the brand would either be dead or way beyond the means of most of us here if porsche did not modernize.

It always has been and always will be a company ran by fairly crazy Germans with odd ideals, a lust for perfection, mismatched green thumbs, and a quality of uniqueness. It's the ambition of a takeover like that, despite its ability to fail that we also see in the ambition set forth on the racetrack and unbelievable ventures like the 918.
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Old 11-07-2014, 08:37 AM   #13
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$20,300 in after tax profit per car in '08 -- pretty impressive figure...
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Old 11-07-2014, 09:42 AM   #14
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A great read, thanks!

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