Volkswagen chief leaves after clashes with unions

HERBERT DIESS, Volkswagen’s chief executive, is unexpectedly leaving the company after a row with union bosses and controversy over his position on the war in Ukraine.

Mr Diess is leaving “by mutual agreement,” Europe’s biggest carmaker said, and will be replaced by Porsche executive Oliver Blume from September.

Mr Diess has been in charge of Volkswagen since 2018. He was initially poached from BMW in the wake of the “dieselgate” scandal to run the Volkswagen brand before being promoted to run the wider group, which also owns marques such as Škoda and Audi.

Since then he has had a number of high profile fights with union chiefs over potential job losses and his management style.

An admirer of Tesla, Mr Diess wanted to slash production times for Volkswagen’s cars to help it compete. He came under pressure after suggesting that up to 30,000 jobs could be at risk if the company could not cut costs in its transition to battery-powered models.

Mr Diess also courted controversy when he called for a negotiated settlement between Russia and Ukraine in May. He said Brussels should be pushing for a peace deal so free trade can resume to protect the European Union’s commercial interests, soliciting a hostile response from Ukrainian leaders.

The war has hit Volkswagen’s production as supplies of wire harnesses made in Ukraine dried up.

In 2019, Mr Diess was also made to apologise for making a play on words with a Nazi slogan. He leaves three years before his contract expires and as the company tries to list Porsche on the stock market to fund its ambitious €52bn electrification programme.

Volkswagen also faces a difficult winter as Berlin and Brussels warns manufacturers to tamp down energy usage and prepare for possible gas rationing.

Mr Diess’s successor is a VW veteran, who joined Audi in 1994 as a trainee. “Team spirit, fairness and passion are decisive for success,” Mr Blume said.