VW May Loan Porsche, May Not...

The struggle of German sports car manufacturer Porsche now seems to rely on the performances its now rival Volkswagen will have throughout the second quarter of 2009. According to Hans Dieter Poetsch, Volkswagen's CFO, his company is considering lending a hand to Porsche should they ask for it, but only if the financial results of the second quarter will allow for the loan.

"We will surely end with a positive result. We've reduced volumes and inventories which is why we have a strong cash flow. In the second quarter we will continue on this path. Net liquidity will remain at a high level," the official was quoted as saying by Reuters.

"If we give a loan, enough collateral needs to be there. Loans can only be given at an arm's length principle. There are no exceptions," he added when asked about a Porsche bailout.

To remind you, at the end of last week, Porsche denied, for now, a 1.75 billion euro loan from the German state, through KfW Bank. An outcome which now places Porsche in a weak bargaining position with VW, regarding the future merger.

The merger is now in a delicate position, as Hans Dieter Poetsch admitted that the deal will take way longer than a few weeks. The possibility of such a plan to be dropped is also on the table.

"It's a demanding task. Important questions need to be resolved beforehand. We're seeking ways, if there are any, to build an integrated firm. At the moment nobody can say if it makes sense to carry on, because important questions need to be examined."
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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