Herbert Diess To Remain VW Group CEO But His Wings Are Being Clipped

In the last couple of months Volkswagen's CEO, Herbert Diess has been locked in a battle with its powerful works council which is fundamentally its union. Because of the moves Diess has made, Volkswagen, as a group has pushed the brand towards EVs, but that has rattled many feathers. On Friday, in a critical meeting, it seemed that Diess was losing to the union, but now the issue has been settled however, Diess, will lose some power.

Peace was brokered by Volkswagen supervisory board chairman, Hans Dieter Potsch which enables Diess to remain CEO of the group, but his focus will be more on strategy and the day to day running of the mass market Volkswagen Group brands will be in the hands of Rauf Brandstatter who is already the boss of the VW brand.

"It is going in the direction that the dispute will be settled, and Diess will remain CEO," one of the sources said, revealing that Brandstatter will also become part of the management board. The mass-market brands include Volkswagen, SEAT, and Skoda.

The ID line of vehicles are the VW's great push in the EV space

This is not the first time Diess has had to cede power to Brandstatter when it had to give up operational command of the flagship Volkswagen brand. Diess is of course backed by the Porsche-Piech family, who are the major stakeholders in the group and are against the union who want him fired.

Diess found himself in hot water when he said that 30,000 jobs could be lost if Volkswagen doesn't rapidly transition to the fully electric car brand. Diess has made an audacious bet of over $90 billion to transition the entire group towards EVs which not only positions it as one of the electric car brands in the world and also attempts to wash the sins of the diesel gate fiasco in the US for which it was fined billions and many of its former executives were convicted.