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Former Porsche execs acquitted of stock manipulation charges

A German court acquitted former Porsche CEO Wendelin Wiedeking and former CFO Holger Harter of stock manipulation charges, according to Bloomberg. Prosecutors alleged the men hid plans to takeover Volkswagen while publicly denying their intentions to investors. The presiding judge didn't find any merit to those claims, though. "There is nothing to the allegations, absolutely nothing," Judge Frank Maurer said, according to Bloomberg. "There was no secret plan to take over VW." Rather than Porsche taking over VW, the exact opposite eventually happened, and both execs stepped down. Investigators first indicted Wiedeking and Harter for alleged stock manipulation in late 2012. A court in Stuttgart dismissed the case in 2014 because of a lack of evidence, but an appeals court later overruled that decision. The current trial finally began in October 2015. If convicted, Wiedeking faced up to 30 months in prison, and Harter could have received up to 27 months, Bloomberg reported. Prosecutors also wanted one million euro ($1.1 million) fines from them and 807 million euros ($910 million) from Porsche. The acquittal might not be the end of this long-running case, though. In Germany, prosecutors have the right to appeal a ruling, and the lawyer hasn't made a final decision yet. If the court thinks there's a reason, the former execs could be back in front of a judge at some point in the future.

What do J.D. Power's quality ratings really measure?

Check these recently released J.D. Power Initial Quality Study (IQS) results. Do they raise any questions in your mind? Premium sports-car maker Porsche sits in first place for the third straight year, so are Porsches really the best-built cars in the U.S. market? Korean brands Kia and Hyundai are second and fourth, so are Korean vehicles suddenly better than their US, European, and Japanese competitors? Are workaday Chevrolets (seventh place) better than premium Buicks (11th), and Buicks better than luxury Cadillacs (21st), even though all are assembled in General Motors plants with the same processes and many shared parts? Are Japanese Acuras (26th) worse than German Volkswagens (24th)? And is "quality" really what it used to be (and what most perceive it to be), a measure of build excellence? Or has it evolved into much more a measure of likeability and ease of use? To properly analyze these widely watched results, we must first understand what IQS actually studies, and what the numerical scores really mean. First, as its name indicates, it's all about "initial" quality, measured by problems reported by new-vehicle owners in their first 90 days of ownership. If something breaks or falls off four months in, it doesn't count here. Second, the scores are problems per 100 vehicles, or PP100. So Power's 2015 IQS industry average of 112 PP100 translates to just 1.12 reported problems per vehicle. Third, no attempt is made to differentiate BIG problems from minor ones. Thus a transmission or engine failure counts the same as a squeaky glove box door, tricky phone pairing, inconsistent voice recognition, or anything else that annoys the owner. Traditionally, a high-quality vehicle is one that is well-bolted together. It doesn't leak, squeak, rattle, shed parts, show gaps between panels, or break down and leave you stranded. By this standard, there are very few poor-quality new vehicles in today's U.S. market. But what "quality" should not mean, is subjective likeability: ease of operation of the radio, climate controls, or seat adjusters, phone pairing, music downloading, sizes of touch pads on an infotainment screen, quickness of system response, or accuracy of voice-recognition. These are ergonomic "human factors" issues, not "quality" problems. Yet these kinds of pleasability issues are now dominating today's JDP "quality" ratings.

VW CFO Hans Dieter Potsch nominated as new board chairman

The search for a successor to Ferdinand Piech has come to an end as the Volkswagen Group has nominated a new chairman. The Executive and Nomination committees of VW's Supervisory Board have put their weight behind one Hans Dieter Potsch, who currently serves on the company's management board as its chief financial officer. He's expected to continue in his current role until November when an extraordinary general meeting of the supervisory board can be called to confirm his nomination and a replacement CFO can be found to take his place. As you may recall, the chairmanship of the Volkswagen board fell until recently to Ferdinand Piech, grandson of Ferdinand Porsche and one of the principals of the Porsche family that holds over 50 percent ownership in Volkswagen through Porsche Automobil Holding SE. Piech went head to head with VW CEO Martin Winterkorn and ultimately lost. Piech resigned and Winterkorn is about to have his term as chief executive extended through the end of 2018. In Piech's place, former union head Berthold Huber was named as interim chairman, but is now referred to in the statement below once again as deputy chairman instead. An Austrian native, Potsch is an industrial engineer by training. He started his career at BMW where he ultimately served as group controller, and subsequently served as CFO and as chairman at a number of German corporations. Potsch joined the VW management board in 2003, initially without portfolio, and soon assumed the financial portfolio – a role he has held until now. In 2009 he took on the additional role of chief financial officer at the Porsche holding company, whose supervisory board representatives are the parties proposing Potsch's nomination as the group's new chairman – even though he is not, strictly speaking, one of their own. In a related development, it appears that Julia Kuhn-Piech will be leaving her board seat sooner than expected. The departing chairman Ferdinand Piech opposed his niece's nomination to the board in his place, and now she'll apparently be stepping down to make way for the family's new choice of chairman.