Management Herbert Diess, leading the transformation of the group since 2018, going from bad to worse with staff representatives.
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A new violent conflict broke out at Volkswagen (VW), between the group of the boss, Herbert Diess and employee representatives, and no one knows how it will end. In exchange, the quarrel has already unscrew by 4% during the day Wednesday, November 3rd. Faced with their leader, employees have apparently unsheathed the most powerful weapon they have at VW, the confidence vote ensures Handelsblatt daily. The phase that opens, if no compromise is found, could lead to the eviction of Herbert Diess, head of VW since April 2018 and led since then one of the biggest transformations ever undertaken by the world’s second largest automaker .
In Wolfsburg, the headquarters of the group, tension mounted in recent weeks. The first shock occurred on September 24 when Herbert Diess hinted at a session of the supervisory board, that 30 000 jobs were threatened at VW. Given the emotion aroused by this comment, he finally said it was only an “extreme scenario” if the company could not manage to significantly improve efficiency and continue its transformation towards electrical and digital.
A second conflict broke out a few days later, when Herbert Diess declined participation in a staff meeting scheduled for Thursday, November 4, in order to attend a conference of investors in the United States. Daniela Cavallo, the new president of the employee committee, the “Betriebsrat” traditionally very powerful at VW, took the announcement as a personal affront and severely criticized the decision, accusing the boss not be interested in the concerns of workers in a situation where the shortage of electronic components affects production. Finally, Mr. Diess changed his mind. He will participate Thursday in this high-risk meeting.
Modernizing the group and reduce costs
This is not the first time that Herbert Diess is on the verge of the layoff. In the summer of 2020 he had saved his job as a narrow margin after a formal apology for accusatory towards some members of the supervisory board. A few months later, a new quarrel had settled the question of the extension of his contract, he required two years in advance. It had been very badly perceived, reinforcing its image of solitary patron, unwilling to bend to the uses of the group. In the VW universe, important decisions are the result of a compromise between two camps with conflicting interests: the Employee Committee and the Land of Lower Saxony, which holds 11.8% of the group’s capital and 20% of rights voting, allies to keep local jobs, and the Porsche-Piëch family shareholders to 31.3% (53.3% of voting rights), more concerned with profitability and results.
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