Report: Monday Meeting Could See Volkswagen's Diess Replaced

Steph Willems
by Steph Willems

A report last week in a German publication stated that Volkswagen Group was looking for someone new to take charge of its namesake brand. The new blood would come in the form of Porsche CEO Oliver Blume, sources said.

We’re now hearing there’s an “extraordinary” supervisory board meeting being held at VW today, and that the result could be current brand chief Herbert Diess being bounced from his role.

That’s according to sources who spoke to Reuters, though a switcheroo at the top wouldn’t mean Diess is gone for good. Diess, soiled but far from unseated by the lingering legal ramifications of the diesel emissions scandal, would retain his CEO role over the auto group, the source said.

As the automaker grapples with the financial burden imposed on it by the coronavirus pandemic and embarks on a pricey — and risky — electric vehicle push, the VW brand is in line for further streamlining. This will inevitably rub the company’s fearsome worker’s union the wrong way.

Over the weekend, a company spokesman confirmed to Reuters that talks regarding cost-cutting are underway, though nothing’s been decided on yet.

At the same time, Automotive News‘ German sister publication reported over the weekend that Diess took aside the company’s top managers late last week to press the need for significant cuts to R&D spending, investments, and fixed costs. The automaker is expected to continue depleting its existing cash pile until at least July, he reportedly said.

To deal with the present and ensure a stable foundation into the future, the publication said the VW brand will need to reduce material overhead by 20 percent.

[Image: Volkswagen]

Steph Willems
Steph Willems

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  • SCE to AUX SCE to AUX on Jun 08, 2020

    Perhaps the cost-cutting is a way of funding the EV program, which VW has discovered is very expensive. But 20% won't be found by renegotiating contracts; it will be achieved by killing off other programs, and that will make for some very hard decisions and even greater commitment to EVs.

  • Steve203 Steve203 on Jun 08, 2020

    Ever since the diesel scandal broke, I have been hoping that the financial pressure will force the company to unwind Piëch's empire building, get rid of the vanity brands, Lamborghini, Bentley, Ducati, Bugatti, and rationalize the redundant brands: Skoda and SEAT. There is no way the company should be running three brands, selling Golf and Tiguan derivatives in the same markets. Outside of Bentley, they bury the finances of the vanity brands so shareholders can't see how much money they are wasting.

    • Hreardon Hreardon on Jun 08, 2020

      @Steve203, Ducati and Bugatti are definitely ripe for culling. SEAT is a big seller in Latin America, which is likely why VW has held off on pulling the trigger - rumor has it that SEAT was *very* close to being axed in 2016-2017. The amount of sharing between Lambo, Porsche, and Audi likely make that brand highly profitable. Word is that there is a lot of acrimony between Audi and Porsche right now as they look to trim power trains and it looks like Audi is getting squeezed on that front. At one point there was talk of moving the B10 Audi A4 to the VW MQB architecture, and moving the rest of Audi's portfolio from MLB to a Porsche derived RWD architecture shared with the Panamera. With talk of cost cutting, moving the A4 to MQB gains credibility (though I doubt it), and I totally can see Audi's MLB being consolidated with the Porsche architectures.

  • Conundrum Conundrum on Jun 09, 2020

    Skoda sells well in Europe with enough differentiation in body and interiors to distinguish it from VW. Why does GM sell Siverados and Sierras? I read that the head of Porsche turned his coronation as new head of VW. Who can blame him?