VW CEO Diess said to push for contract extension amid labor opposition

FRANKFURT — Volkswagen Group CEO Herbert Diess has asked the families who control a majority voting stake to back a contract extension in a bid to break a deadlock at the automaker, two people familiar with the matter said.

The appeal for support from the Piech and Porsche families comes after Diess was forced to relinquish responsibility for the VW brand in June to remain as group CEO.

“He is bringing the issue to a head,” one of the sources told Reuters on Friday.

Volkswagen declined to comment. The owning families declined to comment, the company’s works council and the German state of Lower Saxony, which owns a VW stake, declined to comment.

Diess’ contract is due to expire in 2023 after he was appointed head of the VW brand in 2015 and group chief executive in April 2018.

German companies tend to deliberate over contract extensions only a year ahead of their renewal, but the appeal comes after Diess struggled to win backing for key reforms.

These included installing two allies Arno Antlitz as chief financial officer and Thomas Schmall as chief procurement officer on the management board, three sources told Reuters.

Diess has met opposition to these appointments from VW’s powerful labor bosses who control half of the 20 seats on the company’s supervisory board, or board of directors.

If labor leaders team up with Lower Saxony, which controls a 20 percent stake, they can veto significant decisions.

Rather than approving each individual appointment, the labor leaders insist on approving a “package solution” that is “harmonious,” two people familiar with the deliberations said.

VW’s labor chief Bernd Osterloh is also said to oppose a contract extension, one of the three sources said.

In a post on Linkedin this week, Osterloh said there was no fight about management appointments because no committee on the supervisory board had been formally consulted about the issue.

The issue would be decided “when the time is right,” he said.