The departure of Peter Schutz, an American, as the chairman of Porsche AG was hardly the kind of news that would stop the presses of a great newspaper, but it was a significant event in the world of exotic automobiles. His resignation means that a revered automotive thoroughbred is in deep trouble.

Here's the situation: Porsche sales in the United States, which account for more than 60 percent of the company's total production (about 30,000 of 50,000 cars built annually), have dropped precipitously since the dollar began its slide. Most affected have been Porsche's cheaper (I use the word advisedly) four-cylinder 924s and 944s, which, at $28,000 to $35,000, seem overpriced when compared with such Japanese autos as the Nissan 300ZX, Mazda RX-7, Toyota Supra and Acura coupe.

The so-called "heavy" Porsches -- the exotic 928S 4 and the classic rear-engine 911, which has been in production for a quarter of a century -- also have suffered declines in sales, as have all cars selling for more than $50,000. The prestigious West German company's profits for the last fiscal year are said to have dropped more than $30 million, and sales in the United States are off 30 to 40 percent in recent months. It appears Schutz has taken the fall for a decline in Porsche sales.

But there is more to the story. Much of the trouble with the product lineup predated Schutz's arrival in Stuttgart in early 1981 and has to do with feuding among the principal stockholders of Porsche -- the Porsche family and the Piech family. When Schutz took over, Porsche was aligned with Audi (controlled by the Piech family) and was bearing the weight of the 924, an Audi built-and-designed coupe that had been dumped in Porsche's lap. The automobile was produced at Audi's Ingolstadt factory outside Munich.

Porschephiles, who considered anything except the rear-engine, air-cooled, torsion-bar-suspension 911 as automotive heresy, greeted the 924 with disdain. They even tended to reject the splendid 928 because its engine was front-mounted and water-cooled.

But they were correct about the 924. It was a very ordinary and overpriced automobile. One of Schutz's first moves as chairman was to make the 924 a real Porsche. The suspension was redesigned in Stuttgart and the tepid Audi four-banger was replaced with a lusty Porsche four that was in essence a 928 V-8 sliced in half. The redesigned car was called the Porsche 944, and, although still Audi-built, it was a success.

Schutz then fathered the hot 944 turbo and marshaled in the more aerodynamic and more powerful 928S 4. He also helped craft several daring variations on the venerable 911, including the resurrected turbo version and the $100,000 "slant-nosed" cabriolet. These machines were well received until the collapse of the dollar pushed up prices. The four-cylinder 924 and 944 were especially hard-hit.

Schutz's gamble to concentrate Porsche's investments on the booming American market -- especially in Southern California, where one-fourth of all Porsches are sold -- suddenly came a cropper, and he was out as of Dec. 31. Now Porsche is in the middle of a retrenchment program. The new boss, finance chief Heinz Branitzki, a West German, has announced what is essentially a suspension of production until inventories can be decreased. "The party at Porsche is over," he said.

Some Americans are worried that Branitzki is overreacting. "Cutting production of the 911 and 928 is crazy," says one Porsche dealer. "That's akin to a ship captain tossing the cargo overboard rather than battening down the hatches. The most expensive Porsches have no real competitive threats in the marketplace, and if sales of exotic cars accelerate when the lower income tax rate comes into effect, Porsche may not have sufficient inventory to take advantage of the boom in the market."

Added to the drama is an overlay of family politics that makes "Dynasty" look like "The Adventures of Ozzie & Harriet." The titular leader of the empire is Ferry Porsche, the aging son of the legendary Ferdinand Porsche, creator of such memorable machines as the Volkswagen, the Tiger tank and the 911.

The present family is split into the Porsche and Piech wings through marriage. To say that they don't get along is to say that the Hatfields and the McCoys weren't exactly good neighbors. The plot thickened recently when Ferdinand Piech took command of the ailing Audi branch of Volkswagen, whose sales have plummeted since the flagship 5000 sedan was branded with "unintended acceleration."

The Piechs also own 10 percent of the outstanding Porsche stock, and talk is everywhere that Porsche and Audi will rejoin in a marketing agreement. For years, Porsches and Audis were sold in the same dealerships. Schutz instituted the breakup in 1984, a decision that in retrospect seems brilliant, considering the depth of Audi's problems.

With both companies crippled, many observers believe a reunification would be disastrous. "This would be akin to entering a pair of three-legged horses in the Kentucky Derby," groused one of the largest Porsche dealers.

Porsche will very likely survive its difficulties. The marque is strong. But there are those who see this scenario: Chaos reigns between the rival families, and an agreement with Audi only makes things worse, prompting a buyout bid from an American company. Similar buyouts of European companies by American automakers include Ford's purchase of Aston-Martin, General Motors' ownership of Lotus and Chrysler's bid for Lamborghini.

But Porsche is considered a national asset in West Germany, where public opinion would not permit an acquisition by foreigners. A savior, if Porsche ever needed one, might be cross-town neighbor Daimler-Benz AG, whose Mercedes-Benz sedan lineup could be neatly integrated with the exotic two-seaters of Porsche. If that happened, it would be a shame for Peter Schutz, the man responsible for so much of the modernization of Porsche, to be remembered only as a scapegoat. ::