EWanting to run a Dax group from a subsidiary is a strange undertaking. Herbert Diess tried that, not voluntarily of course, there are also question marks behind the work of the Supervisory Board.
At the helm of Volkswagen, Diess’ power slipped away more and more every day. Predicting developments in the industry early on and naming structural weaknesses in the company are considered his strengths. However, his weaknesses are attributed to a lack of implementation ability and a lack of sensitivity in dealing with the environment. This is one of the reasons why Diess was finally appointed to the top of Cariad, the subsidiary struggling with thousands of employees for clout, which is supposed to give the software a helping hand.
That was a demotion; different things are expected of a CEO. It didn’t really work out anyway. After a long delay, Porsche gave up. For its future electric SUV Macan, Porsche is now using a different software architecture. Diess’ constant references to Tesla’s lead were also not well received in the group. Quarrels with the influential works council did not help to ease the tension either.
How VW is endangering its position
It is therefore not really surprising that Diess now has to vacate the position at the top of the group and hand it over to the Porsche boss Oliver Blume, who has been acting as the crown prince for a long time. Three weeks ago, in a conversation with the FAZ, he denied any ambition for the executive chair in Wolfsburg. Internally, everyone has known for a long time that there are crunches in many corners in the VW Group. Porsche gets along moderately well with Audi and lives in joint development projects in a work relationship rather than a love relationship. Seat is on the brink as a basic mobility-focused brand, being supplanted by higher-yield upstart Cupra. After years of successful growth, Škoda is looking for a new position between value for money and premium.
The VW brand itself is endangering its position, which was previously always a profitable touch above competitors such as Opel, Peugeot or Hyundai, through exaggerated frugality in the technical substructure and increasingly average-looking cars. It is reported from suppliers that only the lowest costs are required and that quality plays a subordinate role. There are indications that this is true. Even the rumor is extremely dangerous for the reputation of VW.
The flower, which appears reserved from the outside, has a mammoth task. He must, as Porsche masters at other price levels, make exciting cars possible again that have pricing power on board, so to speak, as standard. He has to shape the unexpectedly tough and expensive path to the electric car and possibly realign it from global and geopolitical perspectives. He has to master the challenge in a Chinese market characterized by increasing uncertainties, where, due to the disproportionately high proportion of sales, there is much more at stake for VW than for any other manufacturer. And Blume also has to learn how to interact with politics at a new level, which not only means the special influence of the state government in Lower Saxony on business decisions.
The clumsiness in the exchange with Federal Minister of Finance Christian Lindner about the positioning on e-fuels, which is actually quite unspectacular but is now attracting considerable public attention, shows the dimension. Blume’s new tank is not only bigger, but also full of sharks. Hopefully he won’t back down publicly in light of this. More influential personalities with the courage to speak their mind would certainly be good for Germany as an industrial location.
The designated boss knows the owner family behind him, and the workforce already agrees. Blume can refer to the remarkable success story of Porsche in the group, which is not lacking in self-confident executives. It would be no wonder if the initially skeptical capital markets soon welcomed him with a certain sigh of relief. According to the current announcement, Blume is to handle all tasks at the head of the group and at the head of the sports car manufacturer Porsche, which is pushing for the stock market. That can’t work. There will be further changes in the VW Group, in terms of content and personnel. For fans of good cars, this is hopeful news.
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