Volkswagen boss leaves ‘by mutual agreement’ after clashes with unions

Volkswagen chief executive Herbert Diess is unexpectedly leaving the company after a row with union bosses and controversy over his position on the war in Ukraine.

Mr Diess is leaving “by mutual agreement,” Europe’s biggest car maker said, and will be replaced by Porsche executive Oliver Blume from the start of September.

Mr Diess has been in charge of Volkswagen since 2018. He was initially poached from BMW in the wake of the Dieselgate scandal to run the Volkswagen brand before being promoted to run the wider group, which also owns marques such as Skoda and Audi.

Since then he has had a number of high-profile fights with union chiefs over potential job losses and his management style.

An admirer of Tesla, Mr Diess wanted to slash production times for Volkswagen’s cars to help it compete. He came under pressure after suggesting that up to 30,000 jobs could be at risk if the company could not cut costs in its transition to battery-powered models.

Mr Diess also courted controversy when he called for a negotiated settlement between Russia and Ukraine in May.

He said that Brussels should be pushing for a peace deal so that free trade can resume to protect the European Union’s commercial interests, soliciting a hostile response from Ukrainian leaders.

The war has hit Volkswagen’s production as supplies of wire harnesses made in Ukraine dried up.

In 2019, Mr Diess was also made to apologise for making a play on words with a Nazi slogan at a company meeting.

He leaves three years before his contract expires and during a pivotal moment for the company as it tries to list Porsche on the stock market to fund its ambitious €52bn electrification programme.

Volkswagen also faces a difficult winter as Berlin and Brussels warns German industry to tamp down energy usage and prepare for possible gas rationing. 

Mr Diess’s successor is a VW veteran, having joined its Audi business in 1994 as a trainee. 

“Team spirit, fairness and passion are decisive for success,” Mr Blume said.