Herbert Diess
The Volkswagen boss, here shortly after starting in spring 2018, weakened his position with a harsh attack on the supervisory board.
Dusseldorf, Frankfurt offensive Volkswagen-Boss Herbert Diess can hardly place his message to the top of the supervisory board. In front of 3400 top managers, he accused the members of the executive committee that they had pierced corporate media.
“These are crimes that occur in the presidency and can obviously be assigned there,” said Diess. In the video conference, the manager is also said to have warned that the supervisory board weakens the company.
The conference with the executives of the brand Volkswagen took place last Thursday – a few days after a supervisory board meeting at which Diess had to explain to operational inspectors about maladministration. Several listeners confirmed the statements of Diess to the Handelsblatt.
Previously, there had been critical media reports over the past few weeks about problems with the important Golf 8 and ID.3 models. This was very annoying, they say.
The same day, the chairman of the board called Hans Dieter Pötsch the panel held a special meeting to inform them of the allegations. It was also spoken about this ‘replacement,’ says the panel. The Supervisory Board adjourned to Monday – also to examine the possibility of termination without notice.
At the re-meeting, the inspectors decided, at least this was the case to withdraw the leadership of the core brand VW. In addition, the VW boss apologized for his words to top management. He said that the statements were “inappropriate and wrong,” said a VW spokesman. The Supervisory Board accepted the apology.
Nevertheless, he should now only be VW boss on call. The fact that the supervisors are sticking to the 61-year-old, contrary to their original idea, also has to do with the Group’s pressing problems. With important models like the Golf 8 and the ID.3 there is a shortage in production and development. In addition, VW has to make massive savings in the corona crisis.
The task now is to overcome these problems. It would be a rather ungrateful task for a successor if he had to start a new austerity program right away. Potential candidates include: PorscheBoss Oliver Blume and Skoda-Boss Bernhard Maier.
Arch possibly spanned
At Volkswagen, employees are almost used to power struggles, clashes of interests and other disputes – much to the dismay of all employees, who keep seeing their company in a bad light.
But now the top manager may have spanned the arena over the responsibility for mistakes. Especially since the economic situation of the largest car manufacturer in the world has become difficult due to the corona crisis. The Management Board and the Supervisory Board deal with themselves – and not with the current market situation.
Diess had been particularly excited about one point. In the run-up to the supervisory board meeting at the end of May, “Manager Magazin” reported that Diess had requested an early contract extension. After the termination of the criminal proceedings for market manipulation in the diesel scandal, he came to IG Metall boss Jörg Hofmann, who was responsible for this as the deputy chairman of the supervisory board.
Production at VW in Wolfsburg
For important models such as the Golf 8 and the ID.3, production and development are hooked.
(Photo: Bloomberg)
Diess apparently attributed the fact that this advance to the media to an indiscretion in the control committee and regarded the publication as a violation of the law and a breach of confidentiality rules.
The members of the presidium were angry, it is said from their environment. They were informed of the allegations by Diess on the day of the management meeting. In addition to the chairman Hans Dieter Pötsch, the committee also belongs Wolfgang Porsche, Stephan Weil, IG Metall boss Jörg Hofmann as well as the works council heads Bernd Osterloh (Volkswagen) and Peter Mosch (Audi).
In one fell swoop, the 61-year-old Diess, who has led the Volkswagen Group since April 2018, brought the key players from the group of shareholders and the works council against each other. wolfgang Porsche is the representative of the largest shareholder, the Porsche / Piëch family, and Weil (SPD), as Prime Minister of Lower Saxony, represents the interests of the state, the second largest shareholder.
Last Thursday, the Presidium was expanded to include two representatives. Now Hans Michel Piëch, as spokesman for the Piëch tribe, also belongs to this inner circle of the Supervisory Board. Bertina Murkovic, chairwoman of the works council of the VW commercial vehicle division in Hanover, has also moved up.
Decisive competence removed
In a hastily convened meeting on Thursday, the supervisory board then discussed the future of this. There was great excitement about what the VW boss had said about the alleged misconduct by supervisory boards. Some guards would have preferred immediate expulsion. However, since the committee was convened at such short notice, there were formal concerns about such a drastic move.
Finally, on Monday afternoon, the supervisory boards met for another extraordinary meeting, in which negotiations were continued on further cooperation with the VW boss. The short-term separation was off the table.
However, this had to come to terms with the fact that the supervisory board removed a crucial competence from it. The control committee decided that it had to relinquish control of the VW core brand – where the company currently has its biggest operational problems. The Supervisory Board also broke with a Wolfsburg tradition: Actually, the group and brand should always be managed by the same manager.
Ralf Brandstätter was entrusted with the management of the Volkswagen brand, who has been managing VW as day-to-day business as COO (“Chief Operating Officer”). VW officially justified the change with the fact that Diess should be given more freedom as CEO. The real reason, however, is the allegation of violation of the law, as it was also said in circles.
Brandstätter replaces Diess as head of the VW core brand
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Experts also question the group’s claim that Volkswagen wants to give Diess additional freedom for the group strategy by separating the functions. “What remains is more than broken porcelain. The world’s largest car maker is going into another self-inflicted crisis, ”says Ferdinand Dudenhöffer, professor at the CAR Institute in Duisburg.
A Volkswagen spokesman confirmed on Tuesday that Diess had apologized to the supervisory board for his controversial statements at the management meeting. The supervisory board and chief executive had spoken on Monday about the statements. This also explained that his statements were “inappropriate and wrong”, the VW spokesman continued.
The members of the Supervisory Board accepted the apology. They would “continue to support him in his work in the future”. For the late Tuesday afternoon, a company-internal webcast for the management of Volkswagen was also scheduled, on which Diess wanted to comment again on the latest events.
Another group spokesman had previously said that Diess did not want to express that members of the Supervisory Board had made themselves punishable. These statements were made “in the context of press reports”, on the basis of which, in repeated cases, obviously confidential information had also been released to the media on issues of the Supervisory Board.
The Porsche and Piëch families hold more than 53 percent of Volkswagen’s ordinary shares and are therefore the most important shareholders of the Wolfsburg-based automaker. They have their shares in the Stuttgart holding company Porsche SE bundled. The families tried on Tuesday to smooth the waves of the current conflict.
“Problems have to be solved”
“The capital side is still behind him,” says the majority shareholders of Volkswagen. However, it was high time to go back to work in kind. “The company must now get into calmer waters.” Although this is a successful manager, the main shareholder emphasized that the electrification and digitalization had been used to promote important topics related to the restructuring of the group Porsche holding company. “But problems also have to be solved.”
The main task of getting the problems at the VW brand under control now falls to its new CEO, Brandstätter. Before he was appointed the new VW brand boss, Diess had tried to pass the acute problems on to Brandstätter. As a COO, he failed to take countermeasures in good time and eliminate the difficulties.
But the Supervisory Board was not influenced by this criticism – and deliberately appointed Brandstätter as the new brand boss. He had been appointed COO at the brand two years ago, before that he worked as VW’s chief purchasing officer.
Electric car ID.3
In Zwickau, Saxony, production of the first pure electric model series from VW has started.
As a result, he is very familiar with the brand and has all the prerequisites to deal with the problems with the core brand, according to supervisory board circles. “Brandstätter is a good decision,” said another influential Wolfsburg manager.
Volkswagen is struggling to get the new, more comprehensive software to work, which is used in current models such as the Golf 8 and the new ID.3 electric model. Software problems last year ensured that the new Golf model only produced around 8,500 vehicles instead of the originally planned 100,000.
How much Herbert Diess will influence decisions at the Volkswagen brand in the future seems to be unclear at the moment. His role as CEO is also damaged because he has lost the VW brand. Some in Wolfsburg think that there could soon be a change at the top of the group.
More: The crack between Diess and the VW supervisory board can hardly be repaired