Diess future still unclear at Volkswagen

The power struggle in Wolfsburg has apparently still not been resolved. According to an article in German media, the supervisory board has not yet decided whether or not to dismiss their CEO Herbert Diess, who has been under fire from upper management. As it currently stands, Diess is not supposed to be involved in important discussions on future investments at the moment.

Parallel to the Diess affair, the supervisory board is currently discussing the so-called planning round. This is to determine which models will be built in which plant – which will entail corresponding investments if the contract is awarded; if a model is dropped, there is the threat of losses and job cuts.

As reported by the  German publication Handelsblatt with reference to company circles, this year “the CEO, who usually plays a central role, will be largely left out of the planning round”. Instead, the talks with the works councils would be led primarily by the heads of the group brands as well as Porsche boss Oliver Blume in his function as group production director and human resources director Gunnar Kilian.

The report says Diess is being kept informed about the consultations on the allocation of the plants “for example in Hanover, Wolfsburg and in other regions”. According to the group circles, however, he is not “directly involved”. The currently discussed board restructuring – according to the report, VW brand manager Ralf Brandstätter is to be promoted to the group board and Hiltrud Werner, who was once brought in from outside in the wake of Dieselgate, is to be replaced by an internal candidate – which is also not due to Diess’ initiative.

But it remains to be seen what all these developments mean for the future of the CEO. Some see him as being “fenced in” if such decisions are made without the CEO’s input. Others see it as the compromise that could keep Diess in office: Others bear the responsibility for day-to-day business, Diess should concentrate on the big strategic decisions.

While Diess, who hails from Austria, has a management style that is a source of offence to the works council and has increasingly antagonised the government of Lower Saxony, according to the report, the Porsche/Piëch families will continue to hold on to Diess – precisely because of his strategic decision to put the group on a radical electric course. This has built up trust on the capital market.

The decisive supervisory board meeting on the planning round is to take place on 9 December. It is unclear whether and how a decision on Diess will be made then. When the executive committee of the supervisory board is said to have met for consultations on Tuesday evening, there was no rapprochement on the top personnel issue in sight even after four hours. “It was tough and frustrating,” according to sources close to the meeting.

handelsblatt.com (in German)