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Volkswagen board leaders back CEO Winterkorn, propose contract extension after power struggle

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BERLIN — Volkswagen CEO Martin Winterkorn will remain in his job and can look forward to having his contract extended, the leadership of the board said Friday, after a comment by chairman Ferdinand Piech raised widespread doubts about his future.

A turbulent week for Europe's biggest automaker started when Piech, who has long been the company's key powerbroker, was quoted last Friday as telling Der Spiegel magazine he was "at a distance from Winterkorn."

That surprised observers and prompted fevered speculation about the position of Winterkorn, 67, Volkswagen's CEO since 2007. Winterkorn's contract runs until the end of next year.

Winterkorn "is the best possible" chief executive for Volkswagen, Friday's statement from the six-strong executive committee of Volkswagen's 20-member supervisory board said. Piech is part of the committee.

It added that the body "places great importance on the fact" that Winterkorn "will pursue his role ... with the same vigor and success as before, and that he has the full support of the committee in doing so."

PHOTO: FILE - In this April 25, 2013 file picture  Volkswagen AG, board chairman  Ferdinand Piech , right, and his wife Ursula Piech , left, frame Volkswagen CEO  Martin Winterkorn, at an annual meeting of the car manufacturer in Hannover, Germany. Volkswagen patriarch   Ferdinand Piech is drawing criticism over a reported remark that raised questions over the future of the CEO  Martin Winterkorn. Piech, a key company powerbroker, was quoted by Der Spiegel magazine Friday April 10, 2015  as saying he was “at a distance from Winterkorn,” who has been widely considered a likely successor as supervisory board chief. That prompted speculation about his position. (AP Photo/dpa, Julian Stratenschulte,file)
FILE - In this April 25, 2013 file picture Volkswagen AG, board chairman Ferdinand Piech , right, and his wife Ursula Piech , left, frame Volkswagen CEO Martin Winterkorn, at an annual meeting of the car manufacturer in Hannover, Germany. Volkswagen patriarch Ferdinand Piech is drawing criticism over a reported remark that raised questions over the future of the CEO Martin Winterkorn. Piech, a key company powerbroker, was quoted by Der Spiegel magazine Friday April 10, 2015 as saying he was “at a distance from Winterkorn,” who has been widely considered a likely successor as supervisory board chief. That prompted speculation about his position. (AP Photo/dpa, Julian Stratenschulte,file)

The committee will propose extending Winterkorn's contract at a board meeting next February, it said, without specifying how long the extension may be.

The 78-year-old Piech, himself a former CEO, didn't specify last week what his issue with Winterkorn was, though experts have pointed to concerns about profitability at the core Volkswagen brand and a disappointing market share in the U.S. as possible factors.

Winterkorn has received backing from the head of Volkswagen's influential employee council, while the governor of Lower Saxony state, a minority shareholder, criticized the public discussion about the company's leadership. Union and employee representatives make up half of major German companies' supervisory boards.

The Piech and Porsche families together control a majority of shares in Volkswagen. Board member Wolfgang Porsche said in a statement Sunday that Piech's comment about Winterkorn represents "his private opinion" and wasn't cleared with his family.

Volkswagen shares initially rose on Friday's news but closed 1.1 percent lower at 235 euros ($251.66). Frankfurt's DAX index of blue chip stocks was 2.6 percent lower overall.

Also Friday, Volkswagen said it delivered 2.49 million vehicles worldwide in the first quarter, 1.8 percent more than a year earlier. Sales in Europe rose 4.1 percent and deliveries in China were up 2 percent, but U.S. sales declined 1.4 percent.

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PHOTO: FILE In this May 13, 2014 file picture Volkswagen CEO  Martin Winterkorn , right, and Volkswagen board chairman  Ferdinand Piech  arrive at a shareholder meeting of Volkswagen AG in Hannover, Germany.Volkswagen patriarch   Ferdinand Piech is drawing criticism over a reported remark that raised questions over the future of the CEO  Martin Winterkorn. Piech, a key company powerbroker, was quoted by Der Spiegel magazine Friday April 10, 2015  as saying he was “at a distance from Winterkorn,” who has been widely considered a likely successor as supervisory board chief. That prompted speculation about his position. (AP Photo/dpa, Jochen Luebke,file)
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