CEO Diess is withdrawn from the Volkswagen brand

Because the criticism has become louder recently, Herbert Diess has to resign as head of the Volkswagen Group brand. Now there is a new division of labor in Wolfsburg.

Herbert Diess

IIn the power struggle between Volkswagen boss Herbert Diess and the company’s works council boss, Bernd Osterloh, Diess is relinquishing the management of the VW brand. This decision was made by the Group’s management board and the supervisory board confirmed it on Monday: The VW brand will therefore be managed by Ralf Brandstätter from July onwards. So far, Diess has been at the helm of the group and also manages the VW brand.

Brandstätter has headed the brand’s operational business since August 2018. The company announced on Monday evening that this would give them “more freedom for their tasks as CEO”. Diess is quoted as saying that he is pleased that Brandstätter will now “continue to forcefully advance” the development of the brand as its CEO. The change at the top was more silent than was expected in the company. The decision on the new leadership will possibly take longer, it said before the start of the supervisory board meeting.

Diess had been publicly criticized by the works council and its boss Bernd Osterloh because of technical problems with the new Golf 8 and the new ID 3 electric car, which is due to come onto the market in the summer, but above all because of his management style. The dispute escalated at the end of May. In the meantime, however, it seems that the owner families Porsche and Piech, Lower Saxony’s Prime Minister Stephan Weil (SPD) and the employee representatives on the supervisory board have come to an agreement to end the personal union of Diess as group and brand boss.

The management style of Diess met with criticism from the unions mainly because it pushed efficiency, profitability and cost reduction more than usual at VW. This seems to “still not understand that VW is a slightly different company,” said a close observer. The balance of power between strong employee representatives, the owner family and the state, with their mutual give and take, does not fit in with a management style that tends to focus on confrontation.

Diess, who came to Wolfsburg from BMW in the summer of 2015, is said to have messed with the VW system. Brandstätter, on the other hand, knows it inside out. He began his professional career with an apprenticeship as a fitter at VW in Braunschweig, then studied industrial engineering and returned to the company in 1993. He made it clear on Monday that the new brand boss has a different management style.

He thanked the entire Volkswagen team for their great commitment, he said: “Together we will continue on our path.” Osterloh and the works council had repeatedly criticized Diess for not caring enough about the brand and the employees. Brandstätter’s most important task is now to make the large-scale electric offensive announced by VW visible on the streets. “For Volkswagen, the course is set for the future,” said the new VW boss after his appointment.