Volkswagen CEO keeps his job, but is on thin ice

Rumours emerged late last month that Volkswagen CEO, Herbert Diess, could be on the outer following a series of comments about the brand’s electrification switch. 

Now, it’s been reported that Diess will indeed stay on at Volkswagen, but with a few caveats. 

According to Reuters, Diess will now be more focused on the strategy side of the CEO role, with some of his other responsibilities likely to be absorbed by Volkswagen brand chief Ralf Brandstaetter. 

“It is going in the direction that the dispute will be settled, and Diess will remain CEO,” an anonymous source told Reuters.

It’s been reported in German press that Brandstaetter is set to be taking over the role of overlooking Volkswagen Group’s mass market brands, including Skoda and Seat. Although it’s worth noting that none of this has been formally confirmed by Volkswagen themselves. 

Brandstaetter, who’s also now part of the brand’s management board, has been the recipient of some of Diess’ other portfolios in the past. 

His brand chief role is one such example of a former Diess responsibility that was passed over, with this exchange taking place in July of last year. 

As previously reported, Diess drew internal criticism for his comments that if Volkswagen is too slow to transition to complete electrification in its line-up, it could cost the brand around 30,000 jobs. It’s been reported that union representatives didn’t like the sentiment. 

Diess made the comments to Volkswagen’s supervisory board in September, basing his comments on the rise of new rivals like Tesla, which notably just started producing cars in Germany. 

“There is no question that we have to address the competitiveness of our plant in Wolfsburg in view of new market entrants,” said Volkswagen representative Michael Manske, speaking to Reuters off the back of Diess’ comments. 

“Tesla is setting new standards for productivity and scale in Grunheide [where its GigaFactory resides]. A debate is now underway and there are already many good ideas. There are no concrete scenarios.”