VIENNA (AP) – Volkswagen (VW) Chief Executive Officer (CEO) Herbert Diess, whose image had been tarnished in the fallout from the German automaker’s emissions-cheating scandal, is stepping down.
In a surprise announcement on Friday, the Wolfsburg, Germany-based company said Diess will depart September 1 “by mutual consent” with the board. No reason was given for his departure. CEO of VW brand Porsche Oliver Blume will succeed Diess.
Diess, who took over as chief executive in 2018, presided over the automaker at a time of significant change in the industry, including a shift toward increased production of electric vehicles. His contract was set to expire in 2025.
Board Chairman Hans Dieter Poetsch thanked Diess and praised his role in “advancing the transformation of the company”.
“Not only did he steer the company through extremely turbulent waters, but he also implemented a fundamentally new strategy,” Poetsch said.
Diess focussed on Volkswagen’s shift toward zero-emissions vehicles, but analysts said he wasn’t able to create change within the company and that the carmaker has fallen behind in some key developments, such as software implementation.
“With industry challenges accelerating and a growing number of new and fast-follower challengers, new management offers an opportunity to revisit strategy or jump-start stalled relationships,” analysts at Jefferies Equity Research said in a research note.
Shortly before his ouster was announced, Diess posted on LinkedIn about the difficulties facing the automaker – from Russia’s war in Ukraine to a shortage of computer chips that has stymied production.
Despite those struggles, he said he was “very satisfied with our performance”, citing high demand for Volkswagen’s electric vehicles and a rebound in China after COVID-19 lockdowns.
“After a really stressful first half of 2022 many of us are looking forward to a well-deserved summer break,” his post said.
Diess reportedly has clashed with the company’s powerful labour representatives over issues including top personnel decisions.
Workers hold an unusual amount of clout at Volkswagen, through requirements that worker representatives hold board seats and because the company’s home state of Lower Saxony holds a stake in the company.
Diess also was trailed by the emissions scandal. He took over as head of the VW brand shortly before it was caught using software to evade United States (US) emissions requirements for diesel cars in 2015.
Volkswagen admitted installing software that turned on pollution controls when vehicles were being tested and switched them off during everyday driving. That made it look as if the cars met US limits on pollutants known as nitrogen oxides.
The scandal cost the company EUR31 billion (USD34 billion) in fines and settlements.
German prosecutors had charged Diess and Poetsch in 2019 with stock manipulation over a failure to tell investors in time about the looming scandal. The charges were later dropped in return for a EUR9 million payment, with no admission of guilt from the two.
In the announcement on Friday, Volkswagen also said the company’s Chief Financial Officer Arno Antlitz will become the new chief operating officer.
