International Finance Report
PORSCHE RISK MANAGEMENT

TOC \t "Subtitle, 1,Title, 2"\b _TOCRange
Company Overview: PAGEREF _Toc \h 3 I. Foreign Exchange Exposure: PAGEREF _Toc1 \h 3
1.1 Operating Exposure PAGEREF _Toc2 \h 4
1.2 Transaction Exposure PAGEREF _Toc3 \h 5
1.3 Commodity Exposure PAGEREF _Toc4 \h 5 II. Porsche’s hedging strategies PAGEREF _Toc5 \h 8
2.1 Aggressive ‘Put options’ Hedging strategy PAGEREF _Toc6 \h 8
2.2 Diversifying Financing PAGEREF _Toc7 \h 9
2.3 Operational Hedging PAGEREF _Toc8 \h 9
References PAGEREF _Toc9 \h 11

Company Overview:
Porsche is hit head-on by a crisis without precedent at the end of the 1980s, up to threaten the independence of the brand, supreme mantra established by its founders. The stock market crash of 1987, the ruin of many wealthy Americans and new competition from Japanese cars are collapsing sales of German in the United States. In the early 1990s, the bankruptcy threat, while sales dropped tremendously, from 14.000 in 1986 to 5320 units in 1992.
A recovery is considered by Mercedes-Benz or Volkswagen. But in 1993, the management of the company is entrusted to Wendelin Wiedeking, working until then as a production manager. He applies at his arrival drastic changes inspired by Toyota: hierarchical reorganization, suppression of nearly 2,000 jobs, rationalization of production, number of subcontractors divided by three. These choices are obviously intended to reduce costs. Similarly, he decides to bury models 328 and 368, which were unprofitable, and committed the revival of the 911 and launched the study of the Boxster roadster and the Cayenne SUV. In 1997 - 1998, four years after the promotion of Wiedeking, Porsche returned to profits, the most important in the history of the brand. The policy launched by the Porsche CEO is extremely beneficial
Under the new leadership,