VW CEO Herbert Diess. Picture: SUPPLIED
VW CEO Herbert Diess. Picture: SUPPLIED

Frankfurt — Tensions at the top of Volkswagen (VW) over an attempt to radically transform the world’s largest carmaker has spilt over into the public, with the CEO taking a public swipe at his opponents within the company.

In a German business newspaper op-ed, Herbert Diess likened VW to a “tanker” at a time when carmakers’ survival depends on quickly pursuing electrification and digitalisation. He wrote that the company is highly influenced by labour unions who sometimes have different interests than shareholders.

“When I took office in Wolfsburg, I had firmly resolved to change the VW system,” Diess wrote on Friday in Handelsblatt. “That means  breaking up old, encrusted structures and making the company more agile and modern. Together, with many companions, with the same level of motivation, I have succeeded in doing this in many places, but not in some, especially not yet at our corporate headquarters in Wolfsburg.”

The latest call to speed up VW’s overhaul reflects how much of a challenge it’s been for Diess to push through more dramatic reforms. He’s struggled to win support from key stakeholders for his picks to fill top executive posts, people familiar with the matter said earlier this week, and bristled at the slow progress the company has made untangling its conglomerate structure and narrowing its focus to key brands.

The comment about persistent inefficiencies at VW’s headquarters echoes remarks supervisory board member Wolfgang Porsche made at the Geneva International Motor Show last year, which disgruntled labour representatives. In a rare moment of candour, the leader of VW’s reclusive owner family criticised the amount of sway unions has over the company.

Diess wrote that VW’s management is “conditioned on internal competition, shaped by Ferdinand Piëch,” referring to Wolfgang Porsche’s deceased cousin who shaped the industrial giant over two decades as CEO and chair. He said the company’s scale, history and prowess at engineering and manufacturing traditional vehicles don’t protect the organisation from disruption and “can even turn into a burden in a time of dramatic change”.

The changes sweeping the automotive industry “will happen in the next 10 years, with our without VW,” Diess wrote.

Diess has mounted an aggressive push into EVs that analysts see becoming a competitive advantage, but his hard-nosed management style has ruffled feathers across the organisation. He joined VW from BMW five years ago and pushed aside several executives in a sweeping shake-up of management this summer.

Renewed infighting with unions could bog down VW’s efforts to challenge Tesla ’s electric-car leadership by spending a record €73bn on technology over the next five years.

Diess has repeatedly clashed with VW’s unions that often are backed by the German state of Lower Saxony, the company’s second-largest shareholder with a 20% stake. The board took away the CEO’s direct control of the namesake VW brand in June after a dust-up over his request for a contract extension and other issues.


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