FRANKFURT — Volkswagen Group CEO Herbert Diess is stepping down and shall be succeeded by Porsche boss Oliver Blume.
Diess is resigning “by mutual settlement,” VW mentioned on Friday.
Blume will proceed his function as the pinnacle of the Porsche model, flanked by VW’s present Chief Monetary Officer Arno Antlitz, who will assume the place of chief working officer.
The adjustments come into impact on Sept. 1, VW mentioned.
Diess’ future at Volkswagen has been unsure on a number of events throughout his four-year stint as CEO, most not too long ago late final yr over clashes with the corporate’s highly effective works council about his electrification technique and administration model.
His departure comes as the corporate is pushing to beat Tesla at turning into the world’s prime electrical car maker, make amends for software program and execute an IPO for the Porsche sports activities automotive model.
Blume mentioned in a press release: “My focus shall be on the shoppers, manufacturers and merchandise.”
Diess, 63, was employed away from BMW in 2015, shortly earlier than VW admitted to rigging thousands and thousands of diesel autos to cheat on emissions assessments. He has arguably pushed essentially the most aggressive electrification effort amongst legacy automotive producers, incomes plaudits from the likes of Tesla CEO Elon Musk.
Blume, 54, has been touted as a possible successor to Diess for a while, although any changeover was seen a while off after Diess’s contract was prolonged till 2025.
Blume began at VW Group in 1994 as a trainee at Audi, then rose by way of the ranks at Seat and the VW model earlier than becoming a member of Porsche in 2013 as head of manufacturing.
He managed to largely comprise Porsche’s involvement in VW’s diesel-emissions scandal. The sports-car maker acquired diesel engines from sister model Audi, which didn’t adjust to emission rules.
Diess ‘considerably modified VW’
Diess initiated an bold push into battery-cell manufacturing and obtained backing for the IPO of Porsche, which is deliberate for the fourth quarter.
On the identical time, he sometimes allowed friction with VW’s unions and different stakeholders to spill over into public. He likened VW to a “tanker” with “previous, encrusted constructions” in want of breaking apart, vowing to modernize the corporate and transfer extra shortly.
Sources with information of the matter mentioned the Porsche and Piech households, who personal over half the voting rights and a 31.4 p.c fairness stake in Volkswagen, pressed for a change on the helm.
Diess’s hard-nosed management model precipitated fixed friction and undermined his effectiveness. Missteps on key initiatives together with delays at VW’s software program unit additionally contributed to the shake-up, individuals accustomed to the matter mentioned.
VW’s board is betting Blume shall be a extra collaborative and steady chief, sources mentioned.
“Diess was incorrigible. He considerably modified Volkswagen – for the higher. However his communication was depressing,” one supply mentioned, asking to not be named.
Cox Automotive govt analyst Michelle Krebs mentioned the turmoil round Diess had maybe develop into a distraction at VW. “It should not be a shock as a result of his tenure has been rocky and controversial,” she mentioned.
Diess turns into the newest in an extended line of leaders undone by VW’s advanced hodgepodge of energy facilities. Skirmishes between the automaker’s controlling shareholder household, commerce union and the German state of Decrease Saxony that holds a big stake have undermined efficiency and ended careers.
“Herbert Diess has strategically geared Volkswagen group towards electromobility,” Wolfgang Porsche and Hans-Michel Piech, leaders of the household with majority voting rights at VW, mentioned in a joint assertion. “It’s to his explicit credit score that the Volkswagen group as we speak is in a powerful place for additional transformation.”
Bernd Pischetsrieder, Volkswagen CEO from 2002-2006, and Wolfgang Bernhard, VW model chief from 2005-2007 have been compelled out of their jobs after repeated clashes with VW’s works council.
Works council chief Daniela Cavallo had warned that assist for the extension of Diess’ contract would rely on whether or not he might maintain Volkswagen on the forefront of Europe’s automotive trade.
In what could possibly be taken as a warning to Diess’ successor, Cavallo mentioned in a press release on Friday that “job safety and profitability are “equally essential.”
Reuters and Bloomberg contributed to this story