Diess Out, Winterkorn Back In At Volkswagen?
The saga of Herbert Diess continues. It has been almost 10 weeks since he roiled the waters at Volkswagen for daring to suggest the company needs to build new factories that make automobiles more efficiently and at lower cost if it is to survive the competition from the likes of Tesla — which is poised to begin producing the Model Y at its new factory in Grünheide, Germany — and Chinese companies which are beginning to sell cars in world markets in ever increasing numbers.
Diess angered many people at Volkswagen by inviting Elon Musk to participate by phone in a meeting of 200 senior managers in September. Remember that Diess was recruited from BMW. He is not a Volkswagen “company man” and that has rankled plenty of people who have worked their whole lives for Volkswagen and no doubt think they deserve a shot at the top spot in the company.
Lastly, Diess had the temerity to suggest that if Volkswagen is not successful in its quest to become more efficient at building vehicles, up to 30,000 workers might lose their jobs. That was taken by Daniela Cavallo, the head of the works council that represents workers at Volkswagen, as a slap in the face to her people. Soon the narrative (thanks to the destructive power of Fakebook and other social media platforms) became that Diess was blaming the workers for Volkswagen’s woes and was planning to fire 30,000 workers.
As far as anyone can tell, Diess never said any such thing, but in the post-truth world created by the internet, what Diess said or meant is irrelevant. People hear what they want to hear and the social media echo chamber does the rest.
The brouhaha that resulted caused a crisis in confidence in Diess’ ability to continue as CEO of the company. An extraordinary meeting of the seldom used mediation committee of the board of supervisors was convened. Among the members of that committee are Daniela Cavallo, a representative of the state of Lower Saxony, which is one of the largest investors in the company, along with members of the powerful Porsche and Piëch families, who are the real powers behind the throne at Volkswagen.
That meeting was held two weeks ago, but no decision was made yet, as the committee decided to take more time to craft its response to the crises. According to Handelsblatt, a respected German news source (paywall), “After intensive discussions, the leading supervisory board members from the Porsche and Piëch families, the state of Lower Saxony and the employee representatives were unable to agree on a compromise on the future of the 63-year-old.”
The story goes on to say, “Suddenly the supervisory board even wants Martin Winterkorn back. That was at least ‘sensible’, said Lower Saxony’s Prime Minister and Volkswagen supervisor Stephan Weil about the man under whom the company slipped into an existential crisis with the diesel affair. But Herbert Diess, the current VW boss? [T]ake a deep breath.”
When the company extended Diess’ contract in July, it was understood that, going forward, there would be discussion between all interested parties about the future of the company. “Puff cake,” Handlesblatt says. We are not quite sure how to translate that but it sounds a lot like a phrase that gets used frequently here at CleanTechnica’s all graphite and glitter world headquarters — horse puckey. “Since the signature, there has been no contact between Diess and the country. ‘That is not constructive,’ says Weil. ‘That is not a good sign.'” We assume that means Weil feels he has not been party to any such discussions.
The crux of the matter seems to be Diess’ management style, which Wiel describes as “styleless.” Cavallo agrees with that assessment. “We’re tired of hearing time and again that the works council is apparently only concerned with preserving the status quo,” she says. The latest reports suggest the mediation committee expects to make a final, final decision this weekend.
Winterkorn? Really?
Martin Winterkorn is a god to many Germans. In a nation that prides itself on its engineering prowess, he was considered by many as the country’s premier engineer. When the diesel cheating scandal hit in 2015, Winterkorn got his shorts caught in the gears of woe that followed and was banished from the boardroom.
Students of Volkswagen history know the diesel cheating mess had its roots in corporate culture long before Winterkorn was anointed the chosen to lead the company. In fact, it can be argued the Piëch clan that now sits in judgement of Diess was involved in the diesel cheating imbroglio up to its eyeballs, so its criticism of Diess today is a little like the pot calling the kettle black, as my old Irish grandmother liked to say.
What sort of signal would resurrecting Winterkorn send to the rest of the world? Would it suggest Volkswagen is going back to its evil ways where lying, cheating, and rule bending were blessed at the highest levels of the corporation? Would it mean Volkswagen might take its foot off the pedal when it comes to pushing the transition to manufacturing electric vehicles forward?
Winterkorn, whatever his engineering gifts, was deeply committed to the glories of the diesel engine, the engine that made Volkswagen the global manufacturing powerhouse it became before the roof fell in. Does it make sense to bring back the guy who is synonymous with diesel cheating simply because Diess has pissed off the head of the works council?
Diess Is Upbeat
For his part, Diess has been going around this week all smiles. Sales were up dramatically last month. At a management meeting this week to discuss the company’s 5-year investment plan, Diess said negotiations with unions were going well and praised the company’s progress on everything from beating US competitors on autonomous driving to boosting sales in China, according to Reuters, which saw a copy of his speech.”You can see that my mood is very good, because we’ve made a lot of progress in the last few weeks,” he said.
Also this week, Diess went to the Volkswagen factory in Osnabrück, where he said the company is considering producing a convertible based on the MEB electric car chassis, according to Autoweek. Either Diess is just putting on a happy face about his travails or he knows something we don’t know about his fate. One way or the other, we should know what the board intends to do about the his tenure at Volkswagen by Monday.
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