The successor has already been determined: Volkswagen boss Diess resigns surprisingly

Successor has already been determined
Volkswagen boss Diess resigns surprisingly

Completely surprisingly, Volkswagen announces the departure of CEO Diess. He will leave the carmaker at the end of August. His successor has already been determined: Porsche boss Blume will also lead the entire group, but will receive support.

Volkswagen surprisingly exchanges its CEO. Herbert Diess will go on September 1st, the Wolfsburg carmaker said With. His successor will be the boss of the sports car subsidiary Porsche AG, Oliver Blume. He is to continue in his current position in parallel. He is currently working on an IPO for Porsche AG, which should go ahead in the fall. At VW, 54-year-old Blume will be supported operationally by CFO Arno Antlitz, who will also be responsible for day-to-day business as Chief Operating Officer (COO). The 63-year-old Diess has been in charge of Volkswagen since April 2018, he had repeatedly fallen out with the powerful works councils.

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According to insiders, the impetus for the change at the top of Volkswagen came from the owner families Porsche and Piëch. The family representatives saw the need for a change in leadership, several people familiar with the deliberations on the supervisory board told the Reuters news agency. There was no specific reason, but the problems had accumulated. “This is incorrigible,” said one of the insiders. He changed Volkswagen for the better. “But his communication is abysmal.”

Diess’ short-tempered appearance on the supervisory board had previously alienated the heirs of “Beetle” developer Ferdinand Porsche. Technical problems with the new Golf or the first important electric car model ID.3, the weakness of the important China business and delays in the development of Cariad were added. The list of management mistakes that Diess was accused of kept getting longer. In the end, the decision was unanimous, it said.

Diess said goodbye to the summer holidays on Friday with a LinkedIn post – without mentioning an impending farewell: “I am very satisfied with our performance in most of our business areas,” wrote Diess. Some prerequisites, such as chip replenishment, should improve in the second half of the year. “I have no doubt that we will continue to gain momentum in the coming months.” The message was captioned “Happy Holidays!”

Power struggle with the works council

Successor Blume has been with the group since 1994. He has also worked for Audi and Seat. In 2015 he became head of the high-yield subsidiary Porsche. In 2018 he was given a seat on the Group Executive Board. The 54-year-old is an expert in production and has close contacts with both the Porsche/Piëch owner families and the employee representatives. “Oliver Blume has demonstrated his operational and strategic skills in various functions in the group and several brands,” said Chairman of the Supervisory Board Hans Dieter Pötsch. The 54-year-old has been leading Porsche AG for seven years “with great success economically, technologically and culturally”.

Blume says he wants to lead Porsche in the long term. The Porsche team can rely on that, he said according to a statement. This also applies after a possible IPO. “We have successfully positioned Porsche technologically, economically and culturally,” said Blume. He is very happy to lead Porsche AG and the Volkswagen Group together. The sports car manufacturer is part of the VW Group.

The former BMW manager Diess has been in charge of VW since April 2018. The supervisory board has agreed with the 63-year-old to leave, Volkswagen said. Chairman of the Supervisory Board Pötsch thanked Diess. “During his time as CEO of the Volkswagen brand and of the Group, he played a key role in driving forward the transformation of the company.” Diess pushed ahead with the conversion of VW in e-mobility and also the expansion of the business to mobility services.

However, there have recently been a number of problems, especially with the sluggish and increasingly expensive development of in-house software and IT systems. Blume had long been considered a possible successor to Diess. His name had been mentioned several times behind the scenes when a conflict between the VW boss and the powerful works council over possible new austerity programs escalated last year. The CEO had alienated the workforce with scenarios of massive job cuts. He had to relinquish power at the time.

Criticism of communication style

Even before that, there had been violent differences of opinion with parts of the supervisory board about the further strategy and about a possible drastic job cut at Europe’s largest car manufacturer. With his management and communication style, Diess repeatedly offended.

The supervisory board trusts the board under Blume to work more harmoniously: “Blume should continue to drive the transformation forward with the entire board – with a management culture that focuses on team spirit,” the statement said. “From the point of view of the entire Supervisory Board, he is now the right person at the top to further sharpen customer orientation and the positioning of brands and products,” said Pötsch.

Auto professor Ferdinand Dudenhöffer explained that the replacement of Diess also shows what a huge challenge the “Software Defined Car” is for traditional corporations. “Automakers become tech companies like Google, Apple, Microsoft – or they become dependent on the software heavyweights.”

Lower Saxony’s Prime Minister Stephan Weil, who represents the state as the second most important owner on the supervisory board, paid tribute to Diess. He gave the company the impetus for major new projects. Weil said of Blume: “I am confident that he will lead the group with prudence and foresight in a team with the Executive Board, in good cooperation with the works council and with great respect for the employees.”

The IG Metall chairman and deputy chairman of the supervisory board, Jörg Hofmann, emphasized that Volkswagen “must do justice not only to its role as a technological favorite but also as a social role model”. Works council chief Daniela Cavallo made a similar statement. The upheaval in the industry is difficult. VW must emerge stronger from it. “But it is also our aim that, despite the great challenges, job security and profitability remain equal corporate goals.”

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