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Do you have a question about the history of our local club or the Porsche brand in Las Vegas? Drop me an email at jordan_godorov@yahoo.com 

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Porsche Almost Became Part of BMW?

By: Jordan Godorov

As a member of the Porsche Club of America, we are lucky to receive a newsletter regularly from the national office. Sometimes those newsletters highlight Porsche history. I also happen to belong to the BMW Car Club of America. Some months back, I received a notice from the BMWCCA in a newsletter that a 3 book set of BMW “Behind the Scenes” was available for purchase by the general membership. One of the clips from the set was a story about how BMW once had a chance to buy Porsche. I thought that this was fascinating and got me thinking about how different Porsche would be if that happened. Here is the story:

When BMW Went To Buy Porsche – by Steve Saxty

“The late-’80s were a time of seismic upheaval in the car industry. McKinsey, the management consultants, were partly to blame after publishing a well-reasoned discussion paper that gathered global coverage. It had crunched the numbers and concluded that no car manufacturer making less than one million vehicles per year would survive unless they merged or aligned with a partner. BMW was in no mood to be bought out; the Quandt family still owned a majority shareholding, and the company was making good money, but CEO Eberhard von Kuenheim could – like everyone else – see the logic. He concluded that since BMW was some way below McKinsey’s seven-figure-for-survival number then it needed to grow; now was time to shop for a car company to buy and become the acquirer rather than the acquired. 

In early-’91, von Kuenheim dispatched Wolfgang Reitzle, his Board Member For Engineering, to find a company that was a suitably premium fit with BMW. Rolls-Royce/Bentley was an option, and certainly premium, but the two brands – then under the same ownership of the British Vickers Engineering company – were built in such small volumes that they were not enough to change BMW and it needed a bigger fish to swallow. Reitzle found the ideal candidate in Land Rover, then operating as a semi-autonomous organization within the Rover Group that made insipid cars of poor reliability that only the Brits bought in significant numbers. They had a hidden jewel in Mini though, a car that the narrow-minded management had ignored for years. British Aerospace, Rover Group’s owner accepted his offer price but insisted that BMW couldn’t cherry-pick the two brands it wanted and had to buy the whole slightly-rotten Rover Group. Reitzle could see huge issues in that, Rover’s motley collection of cars was not premium and based on Honda product. Despite the attractions of Land Rover and Mini, the entire Group wasn’t a good fit and Reitzle wisely walked away.

His next port of call was Stuttgart, home to Daimler-Benz and Porsche. Obviously, a tie-up with Mercedes might yield collaboration benefits but Reitzle had made a few enemies there (a story within BMW by Design) and the two brands had existed more as natural enemies than friends. Then there was Porsche.

It could not be a better fit; two German brands equally committed to engineering excellence and sporty product, plus – best of all for BMW – one of them was financially on its knees. Porsche was limping along with 968, a heavily facelifted 944 four-cylinder car that was wildly expensive to make and – thanks to the US dollar/Deutsche Mark exchange rate – making a loss, while the aged 911 made next to no money. Worse still, it had had to write-down a $300million loss following the cancellation of its stillborn 989 four-door sedan. At the time – amusing as it is today when Porsche offers four models with four-door bodystyles – it was a radical step to create a four-door sedan. Chief designer Harm Lagaay’s team created an attractive looking car that ushered in the style of the later 993-generation 911, but the engineers had run riot with a unique V8 engine and costs spiralled up into what would be well over a $200,000 sticker price today.

Reitzle met with the Porsche family, including fellow-engineer Ferdinand Piech, and made his pitch. BMW would buy the company but protect its cars by leaving the management in place to run the business, so that it could invest in a new 911 and expand the range. BMW would provide purchasing assistance, testing facilities, logistics and access to capital – the very things that were crippling the sports car maker. All the Porsche family needed to do is name its price. And it did, it was a large $600million – a huge some for a small sportscar maker teetering on the edge.

Reitzle took the $600million number back to CEO von Kuenheim who, was outraged at Porsche’s impertinence when the same number could have bought the far higher volume, if far less appealing, Rover Group. But Reitzle had an ace up his sleeve, his dealings with Ferdinand Piech at Porsche had led to an alternate suggestion that Reitzle join Porsche instead as CEO and turn the Stuttgart company around. Reitzle aspired to being CEO and accepted Piech’s offer. Von Kuenheim was further outraged, not only were Porsche asking too high a price, but they had also hired Reitzle too! This was utterly unacceptable to the by-now furious von Kuenheim who held Reitzle to his contract that forbid him to simply leave and join another carmaker.

It was a stain on Reitzle’s reputation that von Kuenheim was unwilling to remove and forget. When the older man decided to retire and take a seat on the Supervisory Board, Reitzle was overlooked in favour of Production Director Bernd Pischetsrieder. Unfortunately, the new man running things had the same old problem and the same time-worn solution. There were not many partners out there for BMW to dance with now Porsche was out the frame and Pischetsrieder took the disastrous course of buying the entire Rover Group. Sadly it would end up costing BMW twice as much as Porsche.”