Volkswagen faces leadership crisis as CEO demands confidence vote

Volkswagen has risked a leadership crisis on Tuesday after CEO Herbert Diess forced a vote of confidence in his reform efforts when he asked for an early contract extension.

The automaker is convening its Executive Committee to talk about Diess’s demand for the contract extension, long before his present term comes to an end in 2023, three sources informed Reuters on Monday.

Volkswagen Chairman Hans Dieter Poetsch is looking to avert a clash between labour leaders and Diess by delaying discussions about a contract extension, a person knowledgeable with the matter said.

Diess, who left BMW in 2015, and helped Volkswagen to reform following its diesel scandal with a 73 billion euro ($87 billion) electric vehicle investment plan, has grown frustrated with German labor leaders obstructing cost cuts.

The supervisory board’s Executive Committee, which is led by Poetsch, and includes Wolfgang Porsche and Hans Michel Piech, members of the automaker’s owning families, together with labour boss Bernd Osterloh, is due to meet on Tuesday, the three sources had informed Reuters.

“The families continue to support Diess,” said a spokesman for Porsche Automobil Holding SE, the company which holds most of the voting stake in Volkswagen said on Tuesday.