FRANKFURT — Volkswagen Group CEO Herbert Diess obtained a contract extension — giving current backing to the boss overseeing primarily probably the most aggressive push into electrical vehicles by a longtime automaker.
Diess will keep in his publish until October 2025, his 67th birthday, VW said in a statement on Friday.
Diess and his administration crew “have labored with employee representatives to effectively advance the transformation of the group over the last few years,” VW Group Chairman Hans Dieter Pötsch said throughout the assertion.
Beneath the administration of Diess “circumstances shall be optimum for the continued worthwhile progress of all of the agency throughout the coming years as correctly,” Pötsch, 70, said.
Diess’s contract extension was made doable by the most recent departure of labor chief Bernd Osterloh. The pair had repeatedly clashed over approach. Osterloh left Volkswagen’s supervisory board earlier this yr to affix the administration board of VW’s vans unit Traton .
The extension marks a victory for the earlier BMW govt, who twice closing yr was unsuccessful in on the lookout for an early extension to his contract. Inside tensions have been defused in December with a broader settlement amongst key stakeholders on value reductions and totally different appointments of prime executives.
Diess, acknowledged for a hard-nose administration mannequin, has repeatedly clashed with VW’s extremely efficient labor unions since changing into a member of the German industrial massive in 2015, weeks sooner than the company’s dishonest on emissions checks was uncovered.
Disagreements spilled into most people closing yr over plans to trim costs and overcome what Diess described as “encrusted buildings” at Volkswagen’s headquarters in Wolfsburg. The model new contract bolsters his efforts to boost the group’s software program program operations and overtake Tesla as world chief in electrical vehicles.
VW will current an in depth change on its approach through 2030 on Tuesday. It ought to embrace a model new progress site near its headquarters in Wolfsburg for 800 million euros, VW’s works council head Daniela Cavallo, Diess and personnel chief Gunnar Kilian said in a letter to workers.
The funds shall be included throughout the subsequent annual funding overview that’s as a consequence of be launched this fall.
The updated approach might even deal with new initiatives for battery cell manufacturing, according to the letter. Earlier this yr, VW launched plans to assemble six battery cell factories in Europe alone.
VW’s financial effectivity in newest quarters supported Diess’s case for an extension. The automaker has been comparatively resilient amid the COVID-19 pandemic and earlier Friday reported strong preliminary earnings for the first half.
VW’s rollout of EVs this yr “should be a step in the direction of overtaking Tesla’s EV crown in 2023 and catching up on software program program by 2025,” Michael Dean, a Bloomberg Intelligence analyst, said in a report. “That’s welcome as VW makes an try to shrink its valuation gap versus Tesla.”
Reuters and Bloomberg contributed to this report.