Volkswagen CEO Herbert Diess asked for a vote of confidence in his reform efforts by asking for contract extensions, risking a leadership crisis more than two years before his term is set to expire in 2023.
Herbert Diess as the Tokyo Motor Show, 2015. Credit: Ryosuke Yagi / Flickr
Diess has been CEO of the company since 2015 and has helped the company to reform following the much-maligned 'dieselgate' scandal for which Audi boss Ruper Stadler was recently trialled.
In the aftermath of the scandal, Diess and other company heads were accused of not fully briefing shareholders of the pollution scam promptly.
Charges were dropped after VW agreed to a €9 settlement.
VW has since promoted an electric vehicle scheme they hope to have implemented by 2026 which will see 70 new electric vehicle models hit the production line, but Diess has shown frustration at the German labour market blocking cost cuts.
Diesel vehicles have been on the decline for years, following alleged health risks from the NO2 from the fumes.
Read more: VW Would Make EU CO2 Targets By "A Gram Or So," Says CEO
Three sources told Reuters that the supervisory board's executive committee is due to meet Tuesday to decide on these events.
VW declined to comment on the situation.
A 'vote of confidence' is a vote taken to ensure a majority continue to support the policy of a leader or governing body. Its antithesis is a 'vote of no confidence.'
Analysts have predicted it may be difficult to entirely reform an automaker where labour representatives control half the seats on the board and elected representatives have a 20% stake in the company.
On Monday, Bernstein autos analyst Arndt Ellinghorst released a statement on the matter.
He said: “The company has some of the most amazing and most global brands, it has the scale to deploy any technology and the innovation power to be an early mover. What it appears to be lacking is the right corporate governance.
“There should be no illusion, this transformation will always trigger conflicts. Whether there is a new CEO or not, the questions will remain the same, and any VW CEO will need the full backing from VW’s largest shareholders, the Porsche families.”
Diess commented in the German newspaper Handelsblatt on Friday.
He said: “When I took office in Wolfsburg, I had firmly resolved to change the VW system. This meant breaking up old, encrusted structures and making the company more agile and modern.
“Together with many companions with the same level of motivation, I succeeded in doing this in many places, but not in some, especially not yet at our corporate headquarters in Wolfsburg.”
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