Dispute escalates over Volkswagen chief Dies

The controversy over the auto company’s transformation reaches its climax
to me. The supervisory board committee should mediate.

The power struggle with the Labor Council over the restructuring of the German car company promoted by Volkswagen Chairman Herbert Diess appears to have reached its climax. As Reuters learned from corporate circles on Wednesday, the Supervisory Board’s mediation committee must deal with the CEO’s future. “This is a matter for the mediation committee,” said a person involved in the deliberations on Wednesday. Two other initiators confirmed this.

And the newspaper “Handelsblatt” reported that employees of the supervisory board withdrew their confidence in Diss last Wednesday. Those around the oversight board said that an agreement was being sought: “Constructive and confidential talks are underway.” Any results will be communicated in time.

The Porsche SE, through which the Porsche and Bich families hold a majority in the Wolfsburg-based group, did not want to comment.

According to information from corporate circles, the crux of the dispute is the speed with which Dess will require the restructuring of the multi-brand Wolfsburg empire. Recently, the 63-year-old caused turmoil with comments that as many as 30,000 jobs will be on edge if the conversion doesn’t succeed fast enough. This will be every fourth job in Germany. Dess wants Volkswagen to measure itself closely against US electric car maker Tesla, which can manufacture cars in a much shorter time than Volkswagen.

The focus is on the main plant in Wolfsburg, which is concerned about exploiting its production capacity. The world’s largest connected plant of the main brand Volkswagen is under tremendous pressure due to production halts due to a shortage of components. Last year, for the first time in more than 60 years, less than half a million Golf, Tiguan, Touran and Tarraco cars were built in Wolfsburg. There may be fewer in 2021. A source familiar with the matter told Reuters recently that just over 300,000 vehicles rolled off the production line at the Wolfsburg plant in the first nine months. A miracle is bound to happen if the previous year’s level is reached by the end of the year.

Crossing with the Works Board

The conflict escalated because Dess initially refused to attend a staff meeting due to a trip to the United States. Labor Council chairwoman Daniela Cavallo accused him of preferring to meet with investors in America rather than ask questions from the workforce. She emphasized that the former BMW manager lacked empathy. His behavior is unprecedented in the history of the Wolfsburg team. Then Des postponed his trip. He is supposed to speak to about 7,000 employees on Thursday and answer questions from the workforce. There will also be Lower Saxony Prime Minister Stefan Weil (SPD), who sits on the supervisory board as the state’s representative. Lower Saxony is the second largest shareholder of Volkswagen.

The Handelsblatt newspaper, citing corporate circles, reported that Weil distanced himself from Dis on the supervisory board. The prime minister himself did not wish to comment on his duty of secrecy to the newspaper. Employees and the state have a total of twelve seats on the 20-person supervisory board. Neither the Works Council nor the Chancellery of Lower Saxony has commented.

On the mediation committee sit Chairman of the Supervisory Board Hans-Dieter Pösch, Prime Minister Weil, Chairman of IG Metall Jörg Hoffmann and Chairman of the Business Council Cavallo. In the event of a dispute, the committee must make a motion if the supervisory board fails to obtain a majority. Two insiders said the committee has not been formally summoned in the case. However, an agreement should be reached there.

This has been in dispute with the Labor Council for several months. Last summer, according to informed sources, he was on the verge of being fired for condemning the leaks to the supervisory board. In December 2020, a scandal was averted only in the dispute over the contract extension requested by Diess. In July, the supervisory board finally extended his contract until October 2025.

(APA/Reuters)