Volkswagen unexpectedly announced on Friday that its CEO Herbert Diess will step down in a matter of weeks after four years at the helm of the German auto giant as it attempts an ambitious shift to electric vehicles.
Diess will leave the helm of the world’s second-largest automaker “by mutual consent” on September 1, Volkswagen said in a statement.
The outgoing CEO sat in the hot seat at Volkswagen for months amid disputes with employee representatives and nagging problems in the group’s software division.
The change at the top comes as Volkswagen aims to ditch the internal combustion engine and become the world’s largest electric car maker by 2025 – a goal being pushed by Diess himself.
Diess “played a key role” in the transformation of the group, steered the company through “extremely turbulent waters” and “implemented a fundamentally new strategy,” said Volkswagen Supervisory Board Chairman Hans Dieter Pötsch.
Taking the reins is Oliver Blume, the current boss of Porsche sports cars, part of the Volkswagen family of 12 brands, which also includes Skoda and Audi.
The change was decided on Friday at a meeting of the Group’s Supervisory Board.
“Team spirit, fairness and passion are essential for success,” he said in a statement on Friday.
Blume remains CEO of Porsche, which is currently planning an IPO, possibly later this year.
– software error –
Diess took over Volkswagen in 2018 and was tasked with turning the tide once and for all in the 2015 “Dieselgate” scandal, in which Volkswagen manipulated millions of diesel vehicles to rig emissions tests.
Under Diess, Volkswagen has underpinned its electric shift with planned investments totaling 46 billion euros ($46.8 billion) over the next five years.
Most recently, Diess took over responsibility for VW’s tech division Cariad on the board.
But development of a platform to be used in the group’s vehicles has been hampered by “production delays” that have “cost money,” according to German automotive expert Ferdinand Dudenhoeffer.
The software industry has probably “created too many problems and challenges for the VW Group,” he said.
Revitalizing the software division is high on Blume’s to-do list, Dudenhoeffer said, as is the future of Volkswagen’s battery strategy.
In one of his last official acts as CEO, Diess, together with Federal Chancellor Olaf Scholz, laid the ceremonial foundation stone on the site of the group’s first battery factory.
– Separating Style –
The outgoing CEO often caused a stir with his divisive style, which led to arguments.
An open admirer of Elon Musk, the CEO of American electric vehicle pioneer Tesla, Diess said last year that the long-established German automaker needed a “revolution” to take on its US rival.
His suggestion last October that up to 30,000 jobs at Volkswagen in Germany could be at risk if it failed to cut costs when switching to battery-powered models, angered powerful labor representatives.
In 2019, Diess had to apologize for punning a Nazi slogan – “EBIT sets you free” – a clumsy attempt to underscore the importance of operating profits for the group.
The Volkswagen Group as a whole has been in the spotlight lately for its activities in China’s Xinjiang province, where authorities are accused of leading a crackdown on the Muslim minority.
Diess recently said the automaker “should stay” in the region, assuring there was “no forced labor” at the factory it runs with its Chinese partner SAIC.
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