• The New York Times, Tuesday, October 23, 2007 11:45 AM

The European Court of Justice cleared the way for Porsche to take over Volkswagen today by overturning a 47-year-old German law that protected Europe's biggest carmaker against hostile takeovers. Now that Porsche is free to increase its voting stake in VW, analysts predict it will move to become its majority owner.

Porsche chairman Wendelin Wiedeking has declared he wants Volkswagen to rival Toyota--a grand ambition that would require VW, at a minimum, to recapture its lost presence in the American market. Wiedeking has little patience for money-losing models like the Phaeton, Volkswagen's luxury sedan, which never held its own against BMW or Mercedes-Benz.

Current VW management and Wiedeking agree VW needs to rebuild its once-mighty franchise in the American market. VW CEO Martin Winterkorn has made this his top priority and is planning new models that will cater to American tastes by offering less complex and less costly engineering.

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