Volkswagen Group CEO Herbert Diess missed out on his contract extension, but won a critical … [+]
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Embattled Volkswagen Group CEO Herbert Diess failed to get a contract extension during today’s Supervisory Board meeting, but he got almost everything else he wanted.
Diess’s win over the Volkswagen Group’s union influence secures the future of its electric-vehicle programs, at the cost only of basing the EV development center in Germany.
To appease the unions, the talismanic Wolfsburg factory has been earmarked to build Volkswagen’s flagship EV.
In a statement Monday, the Supervisory Board “unanimously resolved” to support Diess’s EV strategy, “in particular the orientation of the company towards electromobility and digitalization.
“Over the coming years, the executive board will implement this strategy under Herbert Diess’ leadership,” the statement read.
Diess has long fought his unions to lower Volkswagen’s German manufacturing and development costs to push the brand of the Beetle into a more modern tech company.
The proposals at the center of Diess’s arm wrestle with Volkswagen’s labor representative and board member Bernd Osterloh were executive appointments and the sell off of under-performing or peripheral brands like Lamborghini, Bugatti, Ducati and even Bentley.
The biggest lightning rod for the confrontation with the Volkswagen board was Diess’s insistence that Audi’s Board Member for Finance and Legal Affairs, Arno Antlit, should succeed the departing Volkswagen Group CFO Frank Witter.
Osterloh tried to use Antlit’s hardline cost-cutting tactics during his stint as the Volkswagen Brand finance chief against Diess.
Diess asked the Supervisory Board to extend his contract by five years, but given the current deal doesn’t expire until 2023, it was clearly a play to bring the unions to heel.
“There is total agreement between the Supervisory Board, the Board of Management and the employee representatives on the Group’s consistent orientation towards our strategic transformation objectives,” Osterloh said in a statement.
Advantage, Diess, with Antlit starting in his new job in July, 2021.
The other big win for Diess was in splitting off the automaking giant’s purchasing and components divisions, which the Board insisted would cut overhead costs by five and seven percent respectively over two years.
In winning a victory at the Supervisory Board today, Diess not only promotes a raft of new allies, but also pulls momentum from a potential Volkswagen Group management rival, Porsche CEO Oliver Blume.
Porsche has been stripped of responsibility for the Bentley brand, which has now returned to Audi, with which it will share much of its future technology.
The next A8 Audi flagship will be co-developed to become Bentley’s first full-electric limousine, and Audi’s CEO Markus Duesmann is an old BMW colleague of Diess’s.
While there is no news on Diess’s plan to offload the Bugatti operation to Croatian high-performance EV maker Rimac, the Lamborghini and Ducati operations are, for now, off the for-sale lists.
“There is agreement on the Board that Lamborghini and Ducati will remain part of the Volkswagen Group,” the statement read.
Other Diess allies to have their positions strengthened include Volkswagen components head Thomas Schmall, who moves to the board seat for technology and Murat Aksel, who takes over the purchasing division.
