As Oliver Blume ascends to the helm of German automaker Volkswagen in September, he will face the challenge of overcoming the challenges that led to the ouster of his predecessor Herbert Diess last week.
Serial technical problems at Europe’s largest car manufacturer and fragile relationships with employee representatives meant the end for Diess as CEO, who was overthrown by a supervisory board coup.
Blume is rising from Porsche, VW’s premium sports car brand, which is set to go public later this year at a turbulent time for the markets.
In his four years at the helm of Volkswagen, Diess, 63, led the old automaker from its 2015 “Dieselgate” emissions cheating scandal on an ambitious program to become the world’s largest electric carmaker by 2025.
But difficulties at VW’s software division Cariad, a pet project of Diess, have delayed important plans and made it harder to catch up with rivals like US manufacturer Tesla.
Software is the “number one challenge,” says auto analyst Matthias Schmidt from Berlin.
Bringing software development in-house, spinning off external suppliers and retaining control of the car’s computer architecture is difficult to achieve, but has potentially huge financial benefits.
Blume “has to decide whether to go ahead with Diess’ plan” or make a strategic decision to “buy in” and “live with the consequence of this potential profit center disappearing,” Schmidt told AFP.
“The idea of doing everything centrally will probably be reconsidered,” said German automotive expert Ferdinand Dudenhoeffer.
– unanimous vote –
Adding to the problems at Cariad, Diess’ position as CEO has been weakened by struggles with employee representatives.
The Austrian-born’s tendency to wear people down the wrong way and the rise of internal spats were the main reasons for his departure, according to an automaker source.
In the vote on his final expulsion shortly before the start of the summer holidays, there were no dissenting votes.
Diess “had enemies” and was “not liked by the politicians represented on the supervisory board or by the works council,” said Dudenhoeffer.
The outgoing CEO’s willingness to deal with conflict is “very important” in order to get the company to deal with its past and find a new direction, he said.
But it is about implementing the changes that Diess recognizes as necessary and not constantly banging heads, added Dudenhöffer.
– ‘Cooperative’ –
Blume should refrain from provocative comparisons with US competitors and sharply worded tweets that brought Diess few friends.
The new boss, who has spent his entire career at Volkswagen, is “more cooperative” than Diess, who was hired by German competitor BMW, Dudenhoeffer said.
CFO Arno Antlitz brings continuity to Volkswagen’s top team and expands his role portfolio to include Chief Operating Officer.
Blume will “continue Diess’ major strategic projects,” said Dudenhoeffer, including the manufacture of VW’s own batteries, the construction of a modern factory near the headquarters in Wolfsburg and the expansion of mobility services with the takeover of the rental company Europcar.
Blume will take the helm of the group on September 1 while retaining his CEO role at Porsche, which is set to go public in the last three months of 2022.
Blume will probably stay with Porsche until the IPO, before he has to “concentrate on running the VW Group machine,” said Schmidt.
The future CEO “will be judged by VW’s success in China and the US,” two key markets where Volkswagen has struggled recently, Dudenhoeffer said.
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