Shakespeare said it best: “Oh what tangled webs we weave when first we practice to deceive.” For years, Volkswagen lied through its teeth to regulators and customers both at home and abroad about how clean its diesel cars were. It didn’t just have a fraught relationship with the truth; it obliterated any semblance of veracity in its dealings with governments and shoppers.
Since the scandal broke in September, 2015, many of the company’s top executives have been tossed overboard. The fabled Martin Winterkorn, the man who humbled Ferdinand Piech in a boardroom coup, found himself out of a job mere weeks after the scandal broke. He was replaced by Matthias Mueller, a Volkswagen stalwart who stepped up to guide the company through the storm-tossed waters that surrounded it because of the diesel cheating mess. The company’s stock price crashed and sales took a serious tumble.
But Mueller carried the mail for the company, returning it to robust profitability amid strong worldwide sales. In fact, its Q1 stats for 2018 are the best in company history. Nonetheless, Süddeutsche Zeitung is reporting that Mueller, whose contract runs through 2020, may be on his way out this Friday when the Volkswagen board meets again.
Mueller has been quite forceful in his efforts to drag the company into the electric car era. What are the electric vehicle views of his successor, Herbert Diess (assuming Diess is actually confirmed as the new erhabener Anführer)? We don’t know exactly. Diess spent most of his career at rival BMW, where he developed a reputation as someone with an unfailing smile who could crack a few eggs at the same time.
Passed over for head of BMW in favor of Harald Kreuger, Diess swung over to Volkswagen to pursue a CEO role. At VW, his major accomplishment seems to have been developing a close working relationship with the company’s powerful unions. Reuters reports that Diess and Mueller agreed to guarantee VW’s manufacturing jobs in Germany until 2025 in order to get approval from the unions for a plan to turn the carmaker into a mass producer of electric cars.
Changing Horses In Midstream
If Mueller did such a good job under difficult circumstances, why change horses in midstream? One hypothesis is that it all comes down to Diess being an outsider, someone who was not intimately involved in the plot to deceive regulators about diesel emissions. Yet, he was present in the room on the fateful day when the company’s top managers were informed in detail about the depth and breadth of the cheating scandal.
Like everyone else in the room (including Mueller, apparently), Diess kept quiet about what he knew until the details exploded into the headlines. Volkswagen is still under investigation for possible criminal violations by authorities in Germany. Still, his knowledge was acquired late in the game compared to the rest of his colleagues.
Auf Wiedersehen, Diesel?
Volkswagen may be doing well in showrooms, but it is still suffering from a diesel fume induced hangover while it spends like a drunken sailor on electric car technology. It also still looks upon the trusty diesel engine — the powerplant that propelled the company into the top ranks of the world’s manufacturers — with wistful fondness and affection. Alas, poor diesel. We knew you well. Perhaps Diess’ job will be to finally rip out the noxious diesel weed by the roots and cleanse the company of its stench forever.
Time will tell, but VW seems to be poised at a crossroad, where one way leads forward into the future and the other leads to business as usual. German’s economic minister has just announced his government stands ready to support the construction of new factories to manufacture batteries for electric cars. Diesel powered the German car industry to the top. It is still casting about, trying to figure out how to keep its economy robust while saying goodbye to Dr. Diesel’s wondrous creation. The Volkswagen board of directors says it is “considering further evolving the leadership structure,” whatever that means.
Mueller will reportedly stay on with the company in a new as yet unspecified role, but Diess will be the one who has his hand on the tiller in the C suite in Wolfsburg. What plans he has to pilot the company into the future is something few outside of the Volkswagen board know much about at this time.
Top image by Jos C. Olijve