Herbert Diess
The VW boss, who is known for his rapid pace of change, has obviously lost patience with his team.
Rarely has a German corporate leader read his Levites like the Levites VW-Boss Herbert Diess. The CEO’s findings is so devastating that with a view to the necessary transformation of the traditional car company, Diess is asking no less than the question of existence.
With all changes that come with the political demand for emission-free mobility and growing use of new technologies in cars connected, no question has been asked by a CEO of a car company so openly. This ‘fire speech in front of his global executives only gives an idea of how great the internal resistance to the necessary changes in the VW-Rich are still.
The fact that the Wolfsburg group made this speech public shows how serious the situation is. Obviously the VW boss, who is known for his fast pace of change, lost patience with his team.
The criticism of a lack of speed and lack of courage to make vigorous and radical changes in direction is directed not only at the management, but at each of the more than 600,000 employees – and certainly also at the powerful works councils.
So far, VW boss Diess had shrunk from such a gloomy future scenario. Looking ahead was comparatively confident, for example with the prophecy that the chances of winning the battle for the mobility of the future were “50:50”.
This finding has now been replaced by an almost apocalyptic analysis, with the sober indication that if we continue at our current pace, it will be very tight for the auto company. He called converting Volkswagen into a digital tech company a gigantic task. 2020 will show how weatherproof, agile and responsive VW has become. “The storm is only really starting now,” Diess warned.
Many VW employees apparently feel nothing or not enough of this storm – which is not surprising. Unlike the traditional companies Thyssen-Krupp, Commerzbank or Deutsche Bank the Wolfsburg-based automobile group looks brilliant. The business model with the sale of internal combustion engines works despite the diesel affair. Every year VW earns a double-digit billion amount.
With such an economic success, the insight into radical change processes is not exactly pronounced. The persistent forces that hold onto the tried and tested as long as possible are correspondingly high. This must succeed in turning these guardians of the acquis into courageous reform drivers who are changing the company and themselves.
Late awakening in the VW empire
The VW boss is right if he VW before the NokiaFate warns. The successful telephone manufacturer has been on the safe side for too long and considered that major innovations are unnecessary. The days of Nokia were quickly counted as Apple launched the internet-connected iPhone.
The risk that VW might fail due to its own complacency despite splendid profits may not be as high as it was back then at Nokia, but it should not be underestimated. After all, the market capitalization of Tesla meanwhile almost on the level of VW.
The bet whether the American tech company will win the race for the mobility of the future or the car company from Wolfsburg is still completely open. Despite recurring problems in production, investors continue to trust in the innovative power of Tesla, This finding must worry everyone at VW.
Against this background, the awakening in the VW empire comes very late, hopefully not too late. Should the world’s largest car company fail due to the transformation, this will not remain without consequences for the business location Germany, The auto industry is and remains the most important industry in the country.
One can only hope that this ‘fire speech has shaken the VW workforce sustainably and that the rethinking required is finally taking place. Nevertheless, the transformation will be painful. And with all understanding for the necessary changes, there will be opposition – especially from the powerful works council against massive job cuts.
Whether Diess succeeds or fails with its conversion plans also depends crucially on the state of Lower Saxony, which, with a share of 20 percent, has a significant influence on the fate of the car company. VW will only survive if management, workforce, union and politics pull together. There is a lot at stake.