Meet the new boss of post-Diesel­gate VW

Sales may be strong but the stench of Diesel­gate still lingers over VW. That needs to change.

CAR (UK) - - Contents - By Ge­org Kacher

VOLK­SWA­GEN SHOCKED the in­dus­try and in­vestors by in­stalling a new group chief ex­ec­u­tive, Her­bert Diess, in mid-April. By VW stan­dards, he’s an out­sider, hav­ing left BMW to take over the Volk­swa­gen brand in July 2015 – just two months be­fore the diesel emis­sions scan­dal en­gulfed the com­pany. Within days of VW’s flout­ing of emis­sions stan­dards be­com­ing pub­lic knowl­edge, CEO Martin Win­terkorn was forced to re­sign – and then-Porsche chief Matthias Müller stepped up to be care­taker group leader.

His reign lasted two-and-a-half years, and VW in­sid­ers hint that Müller didn’t have much no­tice of his time be­ing up. He’d an­nounced record earn­ings, and ex­pected to con­tinue in the role into 2019. But union lead­ers and po­lit­i­cal rep­re­sen­ta­tives from the state of Lower Sax­ony, who have sig­nif­i­cant clout on Volk­swa­gen’s su­per­vi­sory board, were de­mand­ing change.

The 64-year-old chief was ac­cused of let­ting some of the group’s brands run on too loose a leash – with Skoda in­trud­ing on VW turf, for in­stance. And de­spite out­lin­ing a plan for VW to em­brace elec­tri­fi­ca­tion, some key stake­hold­ers com­plained of a lack of clear strate­gic tar­gets group-wide. An­other fac­tion on the su­per­vi­sory board, the four Porsche and Piëch fam­ily mem­bers, dis­agreed with a pro­posal to sell off Du­cati. And chief shop stew­ard Bernd Oster­loh never stopped call­ing for a tougher CEO to fight for worker job se­cu­rity.

Tough­ness goes to the core of en­gi­neer Diess, whose cost-cut­ting ways as BMW’s chief of pro­cure­ment put him into con­flict with parts sup­pli­ers. Fer­di­nand Piëch re­cruited him to boost ef­fi­ciency at VW, and Diess im­me­di­ately clashed with Oster­loh. But soon Diess was find­ing ways to forge al­liances and wring con­ces­sions: agree­ing a €3.7bn cost-sav­ing plan with the unions in early 2017, and safe­guard­ing VW jobs through to 2025 in re­turn for the work­ers em­brac­ing the shift to e-mo­bil­ity. Mean­while, Müller’s han­dling of Diesel­gate was crit­i­cised as clumsy. He seemed too will­ing to turn his back on the diesel en­gine, where oth­ers wanted to em­pha­sise its ben­e­fits. He all too of­ten let it be known that he’d been hap­pier at Porsche.

Diess – whose CV also in­cludes run­ning a Bosch plant, and who owns a small tapas bar in Mu­nich – seems more com­fort­able ad­dress­ing the big pic­ture than Müller. He comes across as a more res­o­lute de­ci­sion-maker who’s will­ing to take risks. And now he’s get­ting the credit for driv­ing for­ward the elec­tri­fi­ca­tion strat­egy, un­der­pinned by the elec­tric MEB ar­chi­tec­ture. One trait Diess does share with Müller, how­ever, is his re­fusal to com­pen­sate Euro­pean own­ers of dodgy diesels.

Now it’s the turn of Diess to try to re-en­gi­neer the VW Group and its sprawl­ing brand port­fo­lio, and project the cul­tural change that will help con­sign Diesel­gate to his­tory. The 59-year-old will keep hold of the VW brand reins and run the new vol­ume car group which also in­cludes Skoda and Seat, as well as in­di­rectly over­see Audi as chair­man of its su­per­vi­sory board. A su­per-pre­mium group – of Porsche, Lam­borgh­ini, Bu­gatti and Bent­ley – will also need to find syn­er­gies and bed down. Diess has bet big on elec­tro­mo­bil­ity and ex­pects 2020 to be the year vol­umes soar. If de­mand rises slower and later, VW could have a prob­lem. But the new CEO isn’t wor­ried. ‘We’re on track,’ he says. ‘In Europe, MEB will help con­sol­i­date VW’s po­si­tion as the top player in the vol­ume seg­ment.’ There’s growth in Latin Amer­ica, the US and China – and that’s be­fore VW in­tro­duces a new bud­get car to China in 2019.

‘Com­pe­tence is not the is­sue here,’ says Diess, ‘but bet­ter co­or­di­na­tion is.’

Diess comes across as a more res­o­lute de­ci­sion maker who’s will­ing to take risks

The out­sider: exBMW man Her­bert Diess’s rel­a­tively short time within VW means he’s not tainted by scan­dal

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