International -- The Stars of Europe -- Turnaround Artists
Wendelin Wiedeking (int'l edition)
CEO -- Porsche -- Germany
Few gave Wendelin Wiedeking much of a chance when the little-known engineer took over the reins of Germany's venerable Porsche in 1992. After all, the previous 15 years had seen a succession of CEOs who tried and failed to manage both the Porsche business and the fickle Porsche family that owns it. By the time Wiedeking came on the scene, years of poor decision-making had left Porsche adrift. Sales and profits had flagged. In 1992 alone, the group lost $130 million.
Enter Wiedeking, a tall, mustachioed redhead from Westphalia in northern Germany. Wiedeking, 47, had worked at Porsche for many years before leaving to head up a components maker. Despite his affection for the carmaker, he showed no mercy. He cut production, slashed the workforce by a quarter, to 6,850, and streamlined management. But his boldest move was to ship in a team of Japanese engineering consultants--a slap in the face for the company's proud German engineers.
Wiedeking accepted the Japanese recommendations and introduced more efficient production methods. The results were dramatic. It used to take more than 120 man-hours to build a Porsche. Now it can be done in 40. Wiedeking also abandoned unprofitable model lines and concentrated production on the top-of-the-line 911, which sells for $70,000 and the $40,000 Boxster. Since 1992, sales have tripled, to about $3 billion, and profits have surged to $186 million.
Not bad for a company many thought would end up as just another badge in a big carmaker's stable--like Jaguar, which Ford bought in 1989. Wiedeking has shown that small can still be beautiful when it comes to carmaking. Porsche now enjoys the highest margins in an industry obsessed with "critical mass," and its share price has outperformed all comers. The next challenge: Getting Porsche's new sports-utility vehicle up and running. Set to debut in 2002, the SUV marks the Porsche's first foray outside of sports-car making.
It could be Wiedeking's lasting legacy--on top of the turnaround, of course. "We returned this company from a valley of tears, and that's not an experience I would like to repeat," he says. Thanks to him, Porsche may never have to.