Dusseldorf, Berlin After CEO Herbert Diess was thrown out, Volkswagen is trying to start over with Oliver Blume. The CEO of the sports car subsidiary Porsche should calm down the VW group after the conflicts of the past few months and, above all, ensure a new team spirit in top management. The 54-year-old will take up his post on September 1 and will remain head of Porsche.
Blume’s most important task at the top of VW, however, will be to end the solo efforts practiced by his predecessor. “Blume should form the board as one and form a team,” said one executive.
At a later time, however, changes in the top management body cannot be ruled out. “There are currently eleven people on the board,” said one member of the supervisory board. Therefore, individual areas could be merged. Blume will take his time with such a decision.
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The post of chairman of the supervisory board at the software subsidiary Cariad also remains vacant for the time being. With Diess leaving, this position is vacant. The difficulties in software development were one of the major bones of contention.
Even under the new Volkswagen CEO Oliver Blume, Cariad will remain one of the Group’s biggest construction sites. In the multi-brand Volkswagen group, there is a tangled mess with serious consequences.
The group will have to develop and maintain two parallel hardware-software architectures for more than a decade, between which there are hardly any synergies – one for VW and one for Porsche and Audi. This cannot be conveyed to experts in modern software development.
At the Cariad software unit, the parallel development of two systems, known internally as E1.2 and E2.0, ties up significantly more human resources than planned. The same applies to the investments in the projects. The parallel development of the driver assistance functions alone at the core brands VW and Audi together cost an additional half a billion euros.
“The supervisory board must have high hopes in Oliver Blume that he will be more successful in solving the most pressing software problems,” comments Bernstein analyst Daniel Röska on the change in leadership. Blume must streamline software development.
Important decisions are to be made
The future VW boss may have to decide whether the E2.0 variant is actually necessary or whether it is sufficient to further develop E1.2 with the help of external tech companies. Blume shouldn’t be thinking about dissolving the Cariad. He is considered a clear supporter of Diess’ idea that the group’s software development should be centralized in a subsidiary.
Blume will have to adapt to criticism, especially from investors, because of his future dual function. “We don’t think that’s a good idea,” adds analyst Röska, “both companies will need clear leadership in the coming months.” And there are potential conflicts of interest, because on the one hand Porsche wants to demonstrate great independence with an IPO. At Volkswagen, on the other hand, there is a basic attitude of keeping the subsidiaries on a tight leash.
After all, the Group’s supervisory board has seen the problem that Blume may be overburdened with his future dual function. That’s why Volkswagen will have a Chief Operating Officer (COO) for day-to-day business in the future to relieve Blume. Arno Antlitz, CFO of the Wolfsburg group, will also take on this post.
Blume is likely to gain further relief. So it is considered certain that he will give up a whole series of advisory and supervisory board positions that go back to his function as Porsche CEO. The car manager is currently also responsible for the production department on the group board. Wolfsburg insiders suspect that Blume will definitely give up this additional task.
Blume and Duesmann have settled the conflict
A conflict that recently burdened the board seems to have been resolved. Blume and Audi boss Markus Duesmann had settled their dispute in the run-up to the change of boss and agreed to work more closely together, according to the group.
The Porsche and Audi bosses clashed on the subject of Formula 1, as Duesmann had prepared the entry, but his brand was later initially denied participation. At the same time, Porsche is preparing its own entry into Formula 1. “These issues have been clarified, both are pulling together,” said one manager. Duesmann should also get a prominent position.
Another important area of work for the future VW boss will be China, where the group is having problems with its new electric models. The main reason: the software functions in the ID series do not meet the requirements of tech-loving Chinese customers. In the most important market for VW, Chinese newcomers such as Nio and Xpeng offer more powerful software systems. The group only sells about 40 percent of its vehicles in China.
In the short to medium term, the Chinese automaker BYD could also “become a threat to manufacturers like VW” in China, says Jan Burgard, head of management consultancy Berylls. But not only there: The car expert is convinced that the Chinese car manufacturer “will cause a lot of attention” as it expands further into Europe.
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Volkswagen had also disappointed its European customers with major software issues with the ID model range. Blume will have to quickly find solutions for the series in order to be on par with the various competitors in terms of software and loading speed.
In China, the new CEO Ralf Brandstätter should also ensure improvement. The car manager, previously head of the VW brand in Wolfsburg, will take up his new position on August 1st. So far, Diess has been responsible for the China business on the Group Executive Board. “The problems in China are his fault,” says the supervisory board.
Despite his early departure, Diess will not have to worry financially. His board contract would have run until autumn 2025. As CEO, he can count on annual remuneration of around ten million euros. The separation agreement with Diess stipulates that the remaining remuneration will be paid to him. As with his predecessor Matthias Müller, this payment should be linked to a consulting contract.
Was the split really “amicable”?
The supervisory board decided on Friday evening to end the cooperation. An official statement said the split was “amicable”. Diess had recently been repeatedly accused of preferring to go it alone and acting past the team. This had increasingly caused irritation, especially in top management and on the board. “There was hardly any basis left for proper cooperation,” said an insider.
Therefore, there can be no talk of an amicable separation. “In truth, it’s a clean sack so that the group can work again,” says the insider. Volkswagen needs a CEO who will be taken seriously by its executives again and with whom there will be real cooperation. And that’s exactly what Oliver Blume is supposed to do.
More: A visionary who failed in the implementation – the balance sheet of VW boss Diess