This should remain VW boss until 2025

After so many irritations in 2020, it is now clear: Herbert Diess will stay with Volkswagen longer as CEO. Despite all the continuity, the largest German company is facing a number of upheavals.

Herbert diess is to continue the VW Group with a new strategy and tackle the upheaval caused by digitization in the automotive industry. The supervisory board decided on Friday that the CEO would receive a new contract until autumn 2025. After the start of electromobility, core projects will now also include networking, services and the development of our own software.

Diess receives a new contract until October 2025

The working world for the more than 660.000 employees of the Volkswagen Group worldwide will also change significantly, as works council chief Daniela Cavallo and HR director Gunnar Kilian emphasized. The group reported strong figures in the middle of the year: The operating profit is already above the overall level of 2020.

So far, Diess was appointed CEO of the largest European car manufacturer until spring 2023. Formally, he is now getting a new contract that should run until October 2025.

The commitment to the former BMW head of development, who was initially head of the core brand in the summer of 2015 VW changed, might surprise some in the industry at the moment. Last year there had been heated discussions about a possible early extension, which Diess himself requested, according to insiders. Normally in Wolfsburg, too, negotiations on the continuation are not held until one year before the expiry.

At the end of October 2025, Diess will be 67 years old. The new contract is seen as the owner's commitment to its course. Billions are flowing into new models, more networking, software and lower-carbon production.

His relationship with the workforce has not been easy in the end. According to reports, this is said to have tried last year to push through a contract extension well before the usual decision-making time. Because the timing was not officially up for debate from the point of view of several supervisory boards, the manager, who likes to be brisk, initially ignored his request.

Chairman of the supervisory board Hans Dieter Pötsch had to do a lot of mediation work in the meantime. With regard to the announcement of the new contract, he now said: “The Supervisory Board will continue to see in the coming years under the leadership of Dr. These are the best prerequisites for the continued successful development of the entire company, especially with a view to Strategy 2030. "

This is what the “New Auto” concept provides

The overall direction for the next nine years, which Diess was instrumental in working out, will be presented in more detail on Tuesday (July 13th). As has already been announced, the “New Auto” concept includes investing a lot of money in a new development center. Around 800 million euros could be invested in the “Campus Sandkamp” in Wolfsburg, according to a letter to the workforce.

The aim is to prepare employees for future tasks: "On the way from the classic engineering and skilled worker group to the fields of work of a tech company, the individual change opportunities become a decisive success factor." 125 million euros in the locations of VW AG.

Business in the group went well in the first half of the year. For the period from January to June, based on preliminary figures, the Wolfsburg-based company reported an operating result of around 11 billion euros - in total, of the Corona crisis In the previous year, before special items, it was a good 10,6 billion euros.

Especially during the lockdown in the second quarter of 2020, closed car dealerships, shutdown plants and unsettled customers in many countries had left the group in the deep red. Before special items, the half-year loss in ongoing business at that time totaled 803 million euros. After the home market of Western Europe had also initially weakened, sales of the VW Group rose significantly across the board of late.

The fears of a prolonged downturn in the entire auto industry after the Corona low at the beginning to the middle of last year have so far not come true. Other providers are also earning well again. However, one major factor of uncertainty is still preoccupying the industry: the global supply crisis for electronic chips.

Conflicts rose to scandal

This is currently being done with I.T-topics Appreciated for his determination. At the same time, however, he repeatedly got into disputes with the powerful ex-works council boss and supervisor Bernd Osterloh at VW. The speed of the restructuring, including the cancellation of several thousand jobs, repeatedly met with criticism from the workforce representatives. For its part, Diess declared that it wanted to break up encrusted structures.

The disputes escalated to a scandal in the summer of 2020 when the CEO accused members of the supervisory board of criminal behavior and “lack of integrity” through indiscretions. He later apologized. On the other hand, advocates backed the manager and emphasized that Volkswagen should not rush to rely on other management staff in the middle of the renovation.

Osterloh has not been in Wolfsburg since the beginning of May; he went to Munich as head of HR at VW commercial vehicle holding company Traton. His successor at the head of the works council and in the presidium of the VW supervisory board, Daniela Cavallo, had announced that she wanted to represent the interests of the workforce with the same determination.