Volkswagen on Thursday moved to turn down rumours that CEO Herbert Diess had been sidelined by issuing an unsolicited declaration of support, after clashes with the company’s labor leaders who resisted plans for deeper cuts.
“The most important message is that the supervisory board and executive committee … are in complete agreement that our CEO Herbert Diess is leading the implementation of our strategy,” said Frank Witter, the Chief Financial Officer, in remarks which were read out on a call with journalists.
Witter acknowledged that “smoke emanating from Wolfsburg” was an indication that how difficult it was to balance the interests of various stakeholders.
Diess has for months pushed to lower costs at the automaker’s German operations, which has resulted in repeated clashes with labor representatives, who control nine of the 19 seats on automaker’s board of directors, known in Germany as the supervisory board.
In June, Diess was forced to issue an apology to the supervisory board after alleging a member of leaking confidential information to the press.
Following the clashes, Diess handed responsibility for managing the core VW brand to internal veteran Ralf Brandstaetter.
“Believe me, his ambition and his urge for rapid and lasting change remain unchanged,” Witter informed on Thursday.
Days after Diess renounced his direct oversight of the VW brand, the automaker revealed a raft of other changes that hit a network of external managers that Diess had brought in to boost efficiency at the automaker.
Volkswagen’s powerful labor chief Bernd Osterloh then went on a roadshow to inform investors the automaker has no requirement for deeper cost cuts in Germany.
In June, Volkswagen said Bernhard Maier, chairman of Volkswagen’s value brand Skoda brand, and Stefan Sommer, the company’s head of procurement, and also Andreas Renschler, who headed up the Trucks division, would depart from the automaker.