Wednesday, December 8th, 2021
Showdown in Wolfsburg
VW supervisory board wants to trim Diess
It has been simmering behind the Wolfsburg corporate walls for weeks. This should end on Thursday. If things go well for Herbert Diess, he will remain at the top of the group. But he will no longer be sole ruler. A large-scale restructuring of the board of directors is likely to ensure this.
Tomorrow, Thursday, should be a day of big decisions for Volkswagen. At the planning round of the VW supervisory board for investments, many, and above all many long overdue decisions – are expected – including those on the whereabouts of CEO Herbert Diess.
In the ongoing dispute over the CEO, who has been counted for weeks, concrete solutions are emerging for the first time shortly before the meeting. According to information from the “Frankfurter Allgemeine Zeitung”, Diess is to hand over the management of the important China business to the previous head of the VW brand, Ralf Brandstätter, in the summer of next year. This position has been vacant since the previous top manager in China, Jochem Heizmann, retired in early 2019. Thomas Schäfer, who was previously the boss of the Czech subsidiary brand Skoda, should move up to the top of the VW brand.
According to the FAZ, the Brandstätter personnel should ensure that Diess can remain at the top of the group on the one hand, but also hand over responsibility for important issues on the other. If that succeeds, the works council, the state of Lower Saxony, which has a stake in Volkswagen, and the shareholder families would have come together again. Brandstätter has meanwhile been traded as the successor to Diess.
Further changes in the board of directors also seem to have been explored between the parties. According to “Spiegel” information, Audi sales director Hildegard Wortmann is also to move into the top committee. This item will be specially created. Until now, Diess was also responsible for sales. In her new role, Wortmann will also be responsible for new mobility services. This is therefore also disempowered here.
That Diess had been counted for weeks is due to the radical savings proposals that the 63-year-old had made in September, which should not have previously been discussed with the influential works council. A mediation committee of the supervisory board had to moderate several times afterwards in order to keep the reform-loving Diess in office at the same time and to smooth the waves in the quarrel with the employee’s bank. With the division of power, a Solomonic solution could finally be found in the group.
More guard rails for the future
But the managers and controllers of the largest German company also had to work hard over the past few weeks beyond the top personnel Diess and other management positions. In fact, in terms of content, everything in the annual autumn round actually revolves around the expenses for the global network of locations. This goes hand in hand with the distribution of models, components and development budgets – and of course the utilization of the plants, with possible consequences for jobs. The pressure on the committee has recently been high, because the group originally wanted to have the key issues resolved by mid-November.
This year, the automotive industry is particularly excited about what is now the 70th planning package (“PR70”) from VW. Volkswagen recently set the goal of building an additional factory for the fully digitized Trinity electric vehicle near the main plant in Wolfsburg. The pending approval of the 20-member supervisory board is likely to be a matter of form, at least in this matter.
Other questions, however, are open. For example, there was heated discussion in advance of where the six new European battery cell plants should be built. The works council has called for at least one more cell plant in Germany. The question of whether and when, in addition to Trinity, another new electric model can be located in Wolfsburg is also controversial. The problem is: The VW headquarters are currently only underused due to the supply crisis for microchips. Ideas are needed here.
In view of the controversy surrounding Diess’ management style and the question of whether he can stay at the top of the group, such points have repeatedly moved into the background in recent weeks. There is no guarantee that tomorrow’s meeting will exceptionally run out without surprises. Everything is “in flux,” a source from the local area is quoted as saying.