Wendelin Wiedeking has helped turn Porsche into one of the world's most profitable automakers. But he could take the fall for an abortive bid for VW.

Is the man responsible for Porsche’s dramatic success, over the last decade, about to take the fall for the German maker’s bold but seemingly futile David-v-Goliath bid to acquire rival Volkswagen?

But from a financial standpoint, at least, Wendelin Wiedeking could make out well should he be forced out as Porsche’s chief executive officer, according to industry sources, who say the hard-driving German manager could claim millions for, among other things, the profit sharing bonuses he’d have stood to collect had he completed a contract now set to expire in 2012.

For months, VW and Porsche have been locked in a bitter battle for control that is, in many respects, a familial melee, the latest in a long-running dispute between the two wings of the Porsche fortune.  Ferdinand Porsche helped create both VW – where heir Ferdinand Piech reigns supreme – and Porsche – where Wolfgang Porsche serves as chairman.

The takeover battle pits Ferdinand Piech, VW's chairman, against his cousin, Wolfgang Porsche, but Wiedeking could become collateral damage.

The smaller sports car manufacturer invested billions of dollars buying up what it thought would be a controlling 51% stake in VW, but for a variety of reasons, including special laws designed to protect Wolfsburg-based Volkswagen from a hostile takeover, the bid failed.  Now, reports from Germany suggest, Porsche is the target, and the daily Suddeutsche Zeitung cites unidentified Porsche supervisory board sources who claim they will sell 49% of their company to VW.  The deal, according to various sources, could be worth more than $11 billion

The weekly Der Spiegel, meanwhile, reports that the mainstream automaker would later buy the remaining stake in Porsche, which became heavily-leveraged in its effort to acquire VW.

Though it is one of the world’s most profitable auto manufacturers, Porsche ran up debts of more than $12 billion while collecting Volkswagen shares.  It now desperately needs money to cover that debt and support its ongoing operations.  Porsche had hoped to get about $2.5 billion from the state-owned KfW development bank, but that request was rejected, last month, triggering peace talks with VW.

It’s now unclear what will happen with talks between Porsche and a Qatari investment fund that had been hoping to acquire a large minority stake in Porsche Automobil Holding SE.

Company insiders confirm that Wiedeking, the man who helped reverse Porsche’s fortunes during his 18-year tenure, is preparing to depart if the deal with Volkswagen goes through.

Wiedeking is considers one of the best chief executives in the auto industry – and also one of the best paid.  Traditionally, top executives in the German auto business have received relatively modest sums compared to rivals in the United States, but a provision of Wiedeking’s contract grants him 0.9% of the automaker’s pretax profits as a bonus, a clause worth $109 million last year.

According to various sources familiar with the negotiations – and German law – Wiedeking could very well demand that he continue to receive his profit sharing payments through 2012, when his current contract expires.

That’s one reason German investors have been reluctant to embrace the proposed resolution of the protracted battle between VW and Porsche.  But it appears that matters could be settled soon, perhaps before the end of the week, with the supervisory boards of the two automakers now scheduled to meet on July 23rd.