The chief of the union of Porsche Uwe Hueck clarifies that no decision has been made if Wedeking will be replaced by Michael Macht who served as the past production chief of the car maker.

The payoff has been generating a loud buzz around the auto industry but it has not been confirmed that such a deal will push through. The CEO has been under the microscope for allowing the holding company to accumulate debts of approximately $12.7 billion while attempting to takeover VW.

Wendelin Wiedeking

Wiedeking also opposed the plans of VW to take a 50% stake at Porsche to ease the company of its financial burdens.

The CEO has been the top man for Porsche since 1993 and has transformed the company from its laggard state to a profitable one until the recent financial crisis.

Under the leadership of Wideking, the pre-tax earnings of Porsche shoot up from 4 billion Euros to about 5.9 billion Euros in 2008. The figures were still set to climb until the credit crunch.

The compensation package being offered for Wiedeking to quit is commensurate to his earnings as Porsche CEO. He is receiving the highest salary in the auto industry which was pegged at $89 million per year in 2007.

There is no final move yet as Porsche considers its moves and offers from parties like Volkswagen and Qatar.

The moves of Porsche are fully backed up by majority of its shareholders but the union at the Volkswagen group is still reviewing the potentials of things to come if the Porsche takeover will push through. The VW end worries that Porsche might interfere with their operations and production especially with the Audi line up which may directly compete with some of the vehicles of Porsche.

In a recent conference in Russia, the finance minister of Qatar verbally expressed the intention of their government to acquire some stakes in Porsche. The amount of the investment and its details has not been disclosed though.

Porsche applied for a loan with the government owned bank KfW. The auto maker is asking for a $2.5 billion dollar loan from the federal government and it will primarily be used to manage their debt.

Porsche acquired over 50% of Volkswagen last year. The process of increasing its VW stake contributed to the ballooning of the debt. Technically the two companies are already combined but a closer integration might help erase their debt.

The main thrust of the negotiation centered on combining ten brands from Porsche and Volkswagen under a single umbrella group. Despite some impediments encountered, the top management of both companies has expressed their desire to achieve the goal amicably and constructively.