Dusseldorf The largest European car manufacturer Volkswagen wants to present key points from its planning for the next five years on Thursday. This should be preceded by a meeting of the supervisory board. The results were actually planned for mid-November. However, the need for further advice on some investment and management issues delayed the process, so that an additional appointment had to be set.
Herbert Diess, in particular, caused a lot of excitement recently: First the CEO had the internal cut of up to 35,000 jobs at the Wolfsburg parent plant run through, then he complained to the supervisory board that his plans were met with criticism. At the same time, Diess praised the US competitor Tesla for the green clover. In the course of this, Diess fell out with the powerful works council and in the meantime even had to fear for his job.
Things have smoothed out a bit recently, and replacing the CEO is no longer an option. The compromise solution, however, includes personnel changes in the group’s executive board, which the supervisory board is expected to resolve this Thursday. As a result, Diess loses a number of operational responsibilities. The most important questions and answers for today:
Usually the Volkswagen investment planning board meeting is a routine matter. Why is it so important this year?
This year it’s not just about investments, new models and the future occupancy of more than 120 production sites worldwide. This time there is also an intensive personnel debate, which mainly relates to a single person, namely CEO Herbert Diess. In the discussion of the past few weeks, the employee side, which is so important at Volkswagen, questioned the further cooperation with Diess. For a while it was even unclear whether the CEO would be able to stay at the top of the group.
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What started the conflict?
In September, Diess had the employees and the supervisory board calculated whether the number of employees at the headquarters in Wolfsburg could be halved. A good 60,000 people currently work at the corporate headquarters, around 13,000 of them in production. In the past, Diess had repeatedly pointed out that Volkswagen absolutely had to become more productive in order to be able to hold its own against new competitors such as Tesla.
Why were the workers so upset?
The works council was particularly angry when Diess brought up the subject of a possible drastic job cuts – behind his back and without open communication. The employee representatives spoke of a breach of trust. The CEO couldn’t deal with his works councils like that. The works councils felt even more deceived because they had agreed to a contract extension for Diess until 2025 in the summer.
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Which decisions are to be expected from the Supervisory Board on Thursday?
The waves have calmed down somewhat in the past few weeks. The board meeting also only marks the end of a series of meetings between shareholders, employee representatives and management. In these negotiations, both sides have come closer again – replacing the CEO is no longer an option. In the matter of this, the supervisory board does not have to make any formal decisions at all, as there is an existing contract with it. Perhaps Diess will receive a public invitation to open communication with the board of directors.
At Volkswagen, Herbert Diess will continue. Are other decisions to be expected on Thursday?
The employee side agrees to a continuation of the cooperation with Diess, but demands further guarantees. “Safety precautions” would be another word for it. The CEO should no longer be able to rule and shape the way he did in the past. He should withdraw more from the operative business and in future, above all, concentrate more on the group strategy. The further development of the company’s own software subsidiary is one of them, for example.
How is this goal achieved?
Primarily through personnel changes in the group’s executive board, which the supervisory board is expected to make this Thursday. Herbert Diess loses a number of operational responsibilities. These tasks are then taken over by new board members. The top management body of the VW Group will be a lot bigger as a result. The most important change is likely to be the appointment of Ralf Brandstätter as the new head of China, previously Chairman of the Board of Management of the Volkswagen Passenger Cars brand. The Wolfsburg-based company has significant problems in the People’s Republic, which is why a top-class guy like Brandstätter is sent to China. He’s supposed to put things back in order there.
Will there be calm again at Volkswagen after this Supervisory Board meeting?
It is impossible to make a serious statement about this at Volkswagen. After Herbert Diess’ contract extension last summer, almost everyone had thought that this would permanently proclaim peace in Wolfsburg. But the past few weeks have clearly shown the opposite. Provocation is part of Diess’ management style. He believes that the progress he believes can sometimes only be achieved if there is a major confrontation at the beginning.
How does the employee side see it?
Of course, workers would immediately disagree. They demand more cooperation from the works council and management. Herbert Diess has been working for Volkswagen for more than six years – and there have always been crashes under his leadership. The recent argument was extremely difficult and tough. The decision on the investment plan has therefore even been postponed for a few weeks. There has never been anything like it in the past. Many in Wolfsburg believe that Diess would not survive another such serious conflict.
Are investment decisions still on the agenda on Thursday?
An investment volume of around 160 billion euros must be approved. The group is waiting for these decisions so that future planning for the entire company can be continued. In Wolfsburg, for example, a completely new car factory is to be built, in which Volkswagen intends to produce the modern electric model series of the “Trinity” series from 2026 onwards. This work alone costs a good billion euros.
Is there a connection between the discussion about Herbert Diess and investment planning?
At first glance, the topics were clearly separated, and there were also different negotiation rounds. The workers’ side certainly need not feel like a loser when it comes to investments. With the discussion about the CEO, she had additional leverage in hand to get a little more out of the investment planning than usual.
More: 160 billion euros for five years: Volkswagen is investing heavily in new plants and models