The crisis is starting to hit even giants who, until yesterday, seemed unassailable. Volkswagen is shaken by a confrontation between the Control Committee and the managing director Herbert Diess. In Germany, listed companies are managed with the so-called "dual system"; in which a Control Committee supports the Board of Directors, controls it and conditions its long-term strategic decisions. VW is having some serious problems in Germany over the combination of a green transaction, with the abandonment of diesel and traditional fuels, the Covid crisis and the development of new technologies. This led to criticisms of Diess's work by the Control Committee made public. Diess didn't take it well and during a conference attended by 3,400 VW managers and executives he directly attacked the Control Committee which "weakens the management of the company".
Open up Heaven! The control committee represents the main shareholders (in this case the Porsche Potsch and Weill families) and the workers with the works councils. Diess was forced to immediately apologize for saving the place, but the break is evident and also based on immediate and objective problems: the Golf 8 and ID.3 models, on which the relaunch of the Wolfsburg company is based, have major development problems and have not met the expected standards. Furthermore, production in Wolfsburg is far from past years and historic highs.
The quarrels with VW management are becoming more frequent and are a clear demonstration of major difficulties for the automotive company. Too many challenges, too concentrated, show the limits of management. Diess, 61, has so far saved the position of CEO; but had to leave the direction of the VW brand to Ralf Brandstätter. A weakening that seems to prepare the way for a definitive divestment.
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/caos-volkswagen-comitato-di-controllo-vs-il-ceo-diess-la-crisi-inizia-a-far-sentire-i-suoi-effetti/ on Wed, 10 Jun 2020 09:46:59 +0000.