POAHY Porsche Automobile Holding SE (PK)

BERLIN—The story of intrigue and back-stabbing atop Europe's biggest auto maker took an unexpected turn on Thursday when the Porsche and Piech clans that control Volkswagen AG named the company's finance chief, Hans Dieter Pö tsch, as their candidate for chairman.

The announcement comes a day after Volkswagen said it would extend Chief Executive Martin Winterkorn's contract through 2018. That seemed to strengthen Mr. Winterkorn's position, which was made precarious earlier this year when Ferdinand Pië ch, VW's chairman at the time, tried to oust him.

Now, Mr. Pö tsch's appointment to the top job at Volkswagen puts him in charge of his current boss and makes clear that Mr. Winterkorn's ambitions to one day become the chairman of Volkswagen may never be realized. Mr. Pië ch's earlier this year sought to prevent Mr. Winterkorn from becoming chairman, citing troubles in emerging market and other concerns.

Wolfgang Porsche, chairman of Porsche Automobil Holding SE and Mr. Pië ch's cousin, said Mr. Pö tsch enjoys the "unlimited confidence of the entire supervisory board" of Porsche SE. That means that the family, including Mr. Pië ch, who sits on the board of Porsche SE, voted unanimously to back Mr. Pö tsch.

After stepping down in April, Mr. Pië ch, scion of Beetle inventor Ferdinand Porsche, seemed to be sidelined. While he stepped down from all posts within Volkswagen, he remained a major VW shareholder and voting member on the supervisory board of Porsche. That company controls VW's voting stock, making Mr. Pië ch something of a silent partner with power to wield.

Mr. Pië ch was isolated within the families when he tried to oust Mr. Winterkorn as CEO. But when speculation emerged in the German press this summer that Mr. Winterkorn could step down as CEO to take the chairman's seat, the families were united in their opposition, said a person familiar with the matter.

"We could not imagine that Winterkorn becomes a member of the supervisory board," that person said. "In the end, yes, Pië ch stopped Winterkorn."

When Mr. Pië ch stepped down, leaving the chairman's post empty, Berthold Huber, former head of the IG Metall trade union, stepped in as interim chairman, charged with finding a new permanent chairman.

Mr. Pö tsch, an Austrian, is well respected in investment circles and deeply understands the company. He has been a member of VW's management board since 2003.

He also is close to the controlling families. He engineered a €5 billion ($5.56 billion) capital increase that bailed out the Porsche and Pië ch family holding after a failed attempt by Porsche AG to take over the larger Volkswagen put the families deeply in debt.

Mr. Pö tsch also is CFO of Porsche and will keep that position when he becomes VW chairman. That decision will be taken at a special meeting of the company's shareholders in November.

Mr. Pö tsch and Mr. Winterkorn will certainly seek common ground and have worked well together in the past. But it could be a difficult role reversal.

"It's unpleasant for Winterkorn, but he could not be chairman. He could only be CEO or leave," said Philippe Houchois, automotive analyst at UBS.

Write to William Boston at william.boston@wsj.com

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(END) Dow Jones Newswires

September 03, 2015 16:35 ET (20:35 GMT)

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