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The Unpleasant Marriage Of Germany’s Top Auto Executives With Government Politicians

A secret and never written codex has been defined in the last 100 years that describes the relationship between the German auto industry and the government. Everybody follows the codex and its rules, but no one talks about it.

A secret and never written codex has been defined in the last 100 years that describes the relationship between the German auto industry and the government. Everybody follows the codex and its rules, but no one talks about it.

Like in a marriage, it contains some do’s and don’ts, but is essentially a pact to assure it is beneficial for both parties. Like in nature, it’s all about a fertile combination that results in many healthy and competitive descendants.

If someone does not respect the codex, you may get demoted or you lose your influence and job. That happens from time to time to avoid a deeper relationship crisis that none of the parties can afford since the option of a divorce does not exist in the codex.

A recent example of a crisis is the CEO of Volkswagen Group, Herbert Diess, insisting on incentives for fossil fuel vehicles instead of searching for a compromise with Chancellor Angela Merkel, the most powerful woman in the world. Someone who is regularly challenging and dismantling Russian President Vladimir Putin and US President Donald Trump is clearly not a partner you want to have a crisis with. 

Diess put her under pressure, which is not a good idea in any relationship, but can be fatal with Merkel. The top automotive manager has known her for many years, and he should have been aware that she is a master of compromises and avoids direct decisions.

Her response was a “Withdrawal of Love,” and in typical Merkel style, the move was expressed not directly but through the Minister-President of Lower Saxony, who is an ally of Merkel and has a seat and 20% voting rights in the powerful Advisory Board of the Volkswagen Group. As a result of that relationship crisis, Diess had to give his Volkswagen CEO role to Ralf Brandstätter (for just the Volkswagen brand, not the Group), losing influence, power, and reputation.

In fall 2021, Germany will vote for a new Parliament (Bundestag), and after 16 years in office, Angela Merkel — who does not want her rule to come to an end like it did for her forced-out-of-office predecessors — decided to define her own destiny by leaving the Chancellor position on her own free will. 

Two German politicians have been positioned for the election for years already, and the one who currently has the pole position is Markus Söder (CSU), the Minister-President of Bavaria, a powerful industrial state which, besides being the base of many other companies, is the location of the HQ of BMW and Audi. 

There are two top executives positioned for the Volkswagen Group CEO role that will likely be available one day if the erosion of Herbert Diess’s power and influence continues: Porsche CEO Oliver Blume and Audi CEO Markus Duesmann. 

Duesmann has been hired, promoted, and supported by Herbert Diess and recently received responsibility for the Mission T Project (“T” stands for Tesla) that intends to shorten the R&D time at the company and develop a next-level BEV for Volkswagen Group to catch up with Tesla. In addition, and as if that was not enough, after the head of the software division, Christian Senger, was just demoted, Duesmann is now also in charge of the newly built Car.Software organization that intends to develop an operating system for all Volkswagen Group vehicles with 10,000 employees.

Both Markus Söder and Markus Duesmann have given an interview with FOCUS Online revealing insights into their industry-government relationship. Listening carefully to them, you find more disagreements about the past, present, and future of the German auto industry than ever.

As the interview has been recorded in German, I translated the key quotes and added an interpretation of the context that intends to help you to understand where the partners contradict each other and disagree on BEVs, hydrogen, the diesel cheating device scandal, and the future.

The desirable future is well described with a quote from the Minister-President of Bavaria, Markus Söder:

“We need a quantum leap.”

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Written By

Alex Voigt has been a supporter of the mission to transform the world to sustainable carbon free energy for 40 years. As an engineer, he is fascinated with the ability of humankind to develop a better future via the use of technology. With 30 years of experience in the stock market, he is invested in Tesla [TSLA], as well as some other tech companies, for the long term.


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