Power struggle at VW leaves Diess with less control
A solution is emerging in the power struggle at Volkswagen. According to insiders, Volkswagen boss Herbert Diess can continue to lead the Wolfsburg group, but he will have to relinquish power. The solution apparently foresees, among other things, that VW brand manager Ralf Brandstätter will be promoted to the group’s board of management.
Both the Reuters news agency and the Handelsblatt quote sources close to the Group as saying that “the dispute will be settled and Diess will remain CEO”. Diess, who became CEO of the Volkswagen brand in 2015 and has led the group since 2018, has repeatedly been criticised for his management style in the past. The current dispute goes back to a supervisory board meeting at the end of September: Diess had presented plans to cut more than 30,000 jobs at the main plant in Wolfsburg, which were apparently drawn up without involving the works council or the supervisory board.
As a result, not only the works council but also the state of Lower Saxony, the second-largest shareholder, withdrew their confidence in Diess. The management dispute had been blocking the company for weeks, and important negotiations, such as those on plant allocation, were reportedly conducted without Diess.
The compromise worked out under supervisory board chairman Hans Dieter Pötsch provides that this will remain the case: Diess is to relinquish power in the operative business and concentrate on strategic issues of the group. Ralf Brandstädter is to take on more responsibilities in the day-to-day business and is also to be promoted to the Group Executive Board. Brandstädter had already succeeded Diess as chairman of Volkswagen’s brand board in 2020, when the latter had to relinquish his dual role as CEO of the group and the brand in the wake of an earlier dispute with the supervisory board.
The compromise, however, is likely to include two other executive board personnel: according to the Handelsblatt, 63-year-old VW chief legal adviser Manfred Döss is to take over the compliance and legal department. Diess would have preferred to abolish the department, which is currently headed by Hiltrud Werner. The department was created in the course of dealing with the diesel scandal and is now said to be superfluous in Diess’ view. With Döss on the board, Diess does not get a confidant but another opponent: Döss is close to the Porsche and Piëch families, he is also on the board of Porsche SE. The families trust Döss to represent their own opinion on the board – even against the chairman of the board. In this way, further influence is to be exerted on Diess.
The appointment of Döss to the group board is only possible because of another personnel matter: with the departure of Hiltrud Werner, the board would have been all-male again. However, the supervisory board was apparently able to agree on the former Deutsche Börse board member Hauke Stars as head of the newly created IT department – this would mean that there would again be a woman on the group board. But this also goes against Diess’ line: according to the Handelsblatt report, the separate IT department is mainly due to the former works council head Bernd Osterloh, Diess himself is said to have said in a small circle that he considers a separate IT department unnecessary.
If the compromise is approved at the important supervisory board meeting on Thursday, not only would the plant planning for the coming year be in place, but also the composition of the executive board. With this decision, Herbert Diess would continue to set the strategic course, but would no longer be involved in its implementation. Whether Diess will accept this loss of power is an open question. According to the Handelsblatt, there are doubts about this, at least in the Porsche/Piëch family.