Volkswagen CEO, facing a series of setbacks, will step down | Your money

VIENNA (AP) — Herbert Diess, the CEO of Volkswagen whose image had been tarnished by the fallout from the German automaker’s emissions cheating scandal, is stepping down.

In a surprise announcement on Friday, the Wolfsburg, Germany-based company said Diess would leave Sept. 1 “by mutual consent” with the board. No reason was given for his departure. Oliver Blume, CEO of the VW Porsche brand, will succeed Diess.

Diess, who took over as chief executive in 2018, chaired the automaker at a time of significant changes in the industry, including a move towards increased production of electric vehicles. His contract was due to expire in 2025.

Chairman of the board, Hans Dieter Poetsch, thanked Diess in a statement and praised his role in “advancing the transformation of the company”.

“He not only led the company through extremely turbulent waters, but he also implemented a fundamentally new strategy,” Poetsch said.

Diess has been focused on transitioning Volkswagen to zero-emission vehicles, but analysts say he has been unable to create change within the company and the automaker has fallen behind in some key developments, such as software implementation.

“With industry challenges accelerating and a growing number of new challengers quickly following, new management presents an opportunity to revise strategy or reinvigorate stalled relationships,” Jefferies Equity Research analysts said in a research note.

Shortly before his ousting was announced, Diess posted on LinkedIn about the struggles the automaker has been facing – from Russia’s war in Ukraine to a computer chip shortage that has hampered production. Despite those challenges, he said he was “very pleased with our performance,” citing strong demand for Volkswagen’s electric vehicles and a rebound in China from the COVID-19 shutdowns.

“After a really stressful first half of 2022, many of us are looking forward to a well-deserved summer break,” her post said.

Diess reportedly clashed with the company’s powerful union representatives over issues such as personnel decisions. Workers hold unusual influence at Volkswagen, due to the requirement that worker representatives sit on the board of directors and because the company’s home state of Lower Saxony has a stake in the company. ‘company.

Diess was also followed by the emissions scandal. Coming from BMW, Diess took over as head of the VW brand shortly before he was caught using software to circumvent US emissions requirements for diesel cars in 2015.

Volkswagen admitted to installing software that turned pollution controls on when vehicles were tested and turned them off during daily driving. This made the cars appear to meet strict US limits on pollutants known as nitrogen oxides.

The scandal cost the company 31 billion euros ($34 billion) in fines and settlements.

German prosecutors had charged Diess and Poetsch in 2019 with stock manipulation for failing to notify investors of the impending scandal in time. The charges were later dropped in return for a payment of 9 million euros (dollars), with no admissions of guilt from either.

In Friday’s announcement, Volkswagen also said the company’s chief financial officer, Arno Antlitz, would become the new chief operating officer.

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