Oliver Blume suceeds Herbert Diess as Volkswagen CEO

As of today, Oliver Blume acts as CEO of both Porsche and the Volkswagen Group. He succeeds Herbert Diess as announced and sets the course right from the start. German media has learnt that Blume will reduce the Board of Management to take decisions more quickly.

Specifically, this concerns Hildegard Wortmann (sales) and Murat Aksel (procurement), who must resign from the VW Group’s top management body. While a spokesperson did not comment when asked by Handelsblatt at first, Volkswagen has since confirmed the news.

The new CEO Oliver Blume will focus on strategy, quality, design and the software subsidiary Cariad. The technical cross-sectional functions such as procurement, research and development, production as well as sales will be bundled at Group level in an expanded management. Murat Aksel will continue to be responsible for Procurement at Group level, in addition to his role as Board Member for Purchasing at the Volkswagen brand. Hildegard Wortmann will continue to be responsible for Sales at Group level, in addition to her role as Member of the Board of Management for Sales and Marketing at Audi AG. Michael Steiner, Board Member for Research and Development at Porsche, will also be in charge of Group Development, while Christian Vollmer, Board Member for Production at the VW brand, will be in charge of Group Production.

Blume thus reduced the number of board members from twelve to nine and had opposed the previous enlargement initiated by Diess early on.

According to the paper, the new Volkswagen CEO has also announced changes in software development, which has ultimately delayed the planned electric vehicles across the Group. The dispute over the direction of the software subsidiary Cariad was one of the reasons for the change at the top of the Group.

Volkswagen now cut (out of necessity) the target set by Blume’s predecessor Herbert Diess himself of developing at least 60 per cent of the software for its car operating system on its own.

Continental may now play a decisive role alongside Bosch to accelerate software development. The DAX listed Group will develop the so-called middleware for VW’s operating system, writes Handelsblatt, quoting industry sources. The middleware enables data exchange between the software and hardware of a car. Neither Continental nor Cariad commented.

Looking back at the era of Diess

Volkswagen Group had announced Diess’ departure in a surprise move on 23rd July. While the Group called it “mutual agreement,” insiders said it was “an outright sacking” since Diess’ provocative leadership style had endangered the cohesion within the Group.

The Supervisory Board trusts Blume and considers him an outstanding team player. At least externally, the CEO is not known for having acted alone in Zuffenhausen; the Board of Directors always acts as one. “Blume is also to continue to drive the transformation with the entire executive board – with a leadership culture that places the team concept at the centre,” the Board stated at the time.

Diess, on the other hand, had once moved from BMW to Volkswagen when he lost out to his former board colleague Harald Krüger in the duel to succeed Norbert Reithofer. Diess initially became brand manager of Volkswagen in the spring of 2015, with Martin Winterkorn as chairman of the Board. After the diesel scandal came to light, in which Diess was also incriminated in the meantime, Winterkorn had to leave, and the then Porsche boss Matthias Müller took over – but Diess was able to remain brand boss. In 2018, Müller took his hat off, and Diess became VW brand and Group CEO in Wolfsburg.

Subsequently – also under the fallout of the diesel scandal – Diess restructured Volkswagen. Like no other volume manufacturer at the time, VW focused on the transition to electromobility. Instead of an e-Golf with a retrofitted electric drive system, Diess opted early on for his own electric platform, the MEB. The other group brands also followed the electric strategy. Diess also laid the foundations for the VW Group to build its own battery cells in the future – his predecessor Müller had still called this “bullshit”. As Chief Supervisor Hans Dieter Pötsch stated in July, “Not only did he steer the company through extremely turbulent waters, but he also implemented a fundamentally new strategy”.

handelsblatt.com (Board restructuring), handelsblatt.com (Software)