There has been much ado about boardroom tussles at General Motors, culminating in last month’s resignation of Jerry York, who threw up his hands in frustration and penned a parting shot condemning the auto maker for being controlled by management.

But the drama pales in comparison with the boardroom brawl at Volkswagen where cronyism and in-fighting have claimed the career of CEO Bernd Pischetsrieder, who steps down at the end of the year.

Pischetsrieder and his management team lost a lengthy tussle with Supervisory Board Chairman Ferdinand Piech, who is installing crony Martin Winterkorn, head of Audi, as puppet CEO.

At VW, it is the board that wields a dangerous amount of power, with no signs of relenting for a number of reasons.

Piech, himself a former Volkswagen CEO, is the grandson of Ferdinand Porsche and a major shareholder in the auto maker his grandfather founded. Porsche now owns 21.2% of Volkswagen, with the intent to increase that stake to at least 25.1%. There are reports the luxury car maker may buy as much as 29.9%, the most it can legally own without making a takeover bid.

Piech also has gained the support of labor, which holds half the board seats.

VW’s unwieldy board represents about five disparate groups of interests, with Porsche and Lower Saxony the largest shareholders. Achieving consensus is much like herding cats, but Piech has positioned himself as the master wrangler with Porsche and labor on his side.

The problem is the machinations appear designed to further the interests of Piech and Porsche, over protestations of management that has been struggling to save Volkswagen.

The reality is VW cannot continue to be a high-cost, non-competitive producer of a limited range of cars for diverse international markets.

The auto maker has consolidated production in Germany, the most expensive place on Earth to manufacture cars.

Pischetsrieder recognized the need to return to the brand’s heritage of affordable vehicles and set out to fix Volkswagen.

He put the onus on Wolfgang Bernhard, head of the VW brand, to execute the necessary restructuring.

Bernhard was making progress in a bid to cut as many as 20,000 jobs, increase productivity and reduce wage levels. He made the tough moves, knowing Pischetsrieder had his back.

The expectation now is Bernhard also will resign, and fears the restructuring efforts will lose steam have investors nervous.

Such worries will reach fever pitch if Piech’s contract, set to expire next year, is renewed.

The power struggle does not bode well for VW, or the auto industry in Europe.

The “Volkswagen affair” has become part of a broader national debate about the role of union and corporate responsibility in Germany.

Piech’s maneuverings likely will scuttle any hope of Volkswagen emerging as a shining example of reform – and woe to anyone who follows its lead.

apriddle@wardsauto.com