4758 VW's top board seeks ways to defuse leadership standoff

VW’s top board seeks ways to defuse leadership standoff

HAMBURG — Volkswagen pledged to continue talks among its key stakeholders on Wednesday following a meeting of the company’s supervisory board, as the world’s largest automaker seeks ways to defuse a leadership crisis.

The meeting of the board of directors was convened after CEO Herbert Diess demanded a contract extension and more backing for his reform efforts, some of which had been opposed by the company’s powerful labor chiefs.

“Talks between the participants continue in a constructive manner,” the supervisory board spokesman said in a statement.

“Decisions were not made in today’s meeting, as expected.”

Diess has sought to shift VW from being the world’s biggest maker of combustion engined vehicles into a company capable of mass producing electric and increasingly autonomous cars.

The pace and depth of his reforms, including efforts to lower costs in Germany and to transform Volkswagen into a tech company, has led to clashes with labor leaders eager to protect local jobs.

Diess and the unions clashed over key issues including appointments to the management board, and whether to extend the CEO’s contract beyond 2023, the sources said.

Volkswagen is less efficient and has higher costs than key rivals and Diess has argued that costs must come down to free up resources for high-tech cars.

VW Chairman Hans Dieter Poetsch has lobbied to avoid a discussion about the contract extension, on the grounds that it is not pressing until nearer 2023, when it is due to expire, people familiar with the matter said this week.

Volkswagen’s labor bosses, who control half the seats on the automaker’s supervisory board, are likely to oppose a contract extension for Diess, plunging it into crisis.

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The management stalemate has also seen Diess encounter opposition to his efforts to replenish the management board.

Diess has attempted to install Arno Antlitz as CFO to replace Frank Witter, who is due to retire in June, and to hire Thomas Schmall as management board member responsible for components, replacing Stefan Sommer, who has already left the company, sources told Reuters.

The appointments had been delayed because VW’s labor leaders had insisted on approving a “package solution”, two people familiar with the talks told Reuters last week.

“We are cautiously optimistic that we will be able to discuss a comprehensive proposal,” another source said on Tuesday.

VW management sources told Handelsblatt business paper that Diess has lost the support of his top executives. “People are not following him any more,” one source told the paper.

Senior managers are fed up with Diess continually saying in the press that Tesla is better than VW, the paper said. Diess wrote an opinion column in Handelsblatt last month in which he referred to the German industrial giant as still having “old, encrusted” structures that must be broken up.

In June, Diess was stripped of his leadership of the automaker’s core VW brand after internal disputes.

Automotive News Europe contributed to this report.

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