VW chief apologises to board over leaking accusations

Volkswagen chief executive Herbert Diess had apologised on Monday to the carmaker’s supervisory board for accusing its members of being responsible for damaging leaks, just hours before he was replaced at the helm of VW’s core brand.

The German group announced a series of sudden management changes late on Monday, after workers’ representatives criticised executives for technical problems that delayed deliveries of the new Golf 8 model and hampered the production of VW’s flagship electric vehicle, the ID.3.

The Wolfsburg-based company said Ralf Brandstätter, previously chief operating officer at the Volkswagen brand, would take over from Mr Diess at the marque, while group procurement executive Stefan Sommer would leave at the end of the month.

Last week, Mr Diess told thousands of managers that confidential information about the group’s software failings had leaked from the supervisory board, which includes members of the works council, as well as representatives of shareholders Porsche SE and the state of Lower Saxony.

The accusation angered several supervisory board members and, at a meeting on Monday, the 61-year-old apologised in person and in writing, according to a person familiar with the matter.

A spokesperson for the supervisory board said Mr Diess acknowledged that his statements were “inappropriate and wrong”. The board would “continue to support [Mr Diess] in his work”, the spokesperson added.

German corporations are run via a two-tier board system, with the management board, made up of executives including the chief executive, reporting to a supervisory board including a chairman and representatives of workers and shareholders.

In a statement on Tuesday, VW said that, contrary to German press reports, Mr Diess “did not mean to express” the view that supervisory board members had committed a criminal offence in divulging information.

Mr Diess, who moved from BMW to become head of the VW brand in 2015, was made chief executive of the entire VW group in 2018, but continued to occupy both roles. The VW brand is by far the largest of the group’s 12 marques, accounting for €88bn in revenues last year.

In its statement late on Monday, the world’s largest automaker said the appointment of Mr Brandstätter was designed to give Mr Diess “greater leeway for his tasks as group CEO”.

It added that the Bavarian executive would now spend more time increasing co-operation between brands and on “the transformation of the group into a digital tech company”.

Mr Brandstätter, a company veteran born just a few miles away from its headquarters, said the VW brand was “developing into one of the leading providers of carbon-neutral mobility”.

However, Professor Ferdinand Dudenhöffer, director of the Center Automotive Research in Duisburg, warned that VW was facing a “self-inflicted leadership crisis at an extremely challenging time”, when the shift to electric vehicles and the effects of the coronavirus pandemic were already dragging on the group.

“The organisational structure of VW, the world’s largest car manufacturer, is unbalanced,” he said, pointing to the strength of the unions and large stakeholders.

Mr Sommer, the former head of supplier ZF who helped VW secure battery production for its electric vehicle ambitions, would leave “at his own request”, VW said on Monday.

Later on Tuesday, VW’s executive board will discuss the initial findings of an internal investigation into the publication of an Instagram advertisement that the company admitted was racist for its depiction of a dark-skinned man being manipulated by a large white hand.

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