Volkswagen CEO Herbert Diess is rumoured to stay on as the lead for Europe’s biggest automotive group. This forms part of a solution that will see him relinquish some responsibilities after a battle with labour leaders.
According to two people familiar with the matter, as reported by Reuters, the solution would potentially end the carmaker’s latest leadership battle. This is something that has created a notable amount of uncertainty among investors and led the group’s preferred shares to fall significantly in recent weeks.
After prolonged negotiations led by Volkswagen Supervisory Board Chairman Hans Dieter Poetsch, a way forward has been found under which 63-year-old Diess, who has led the company since April 2018, will likely keep his job, the sources said.
“It is going in the direction that the dispute will be settled and Diess will remain CEO,” one of the people said.
Volkswagen brand chief Ralf Brandstaetter has been selected to join the management board while Diess will focus strictly on strategy, the sources added.
Diess has already released responsibility for the Volkswagen brand to Brandstaetter as of last year. This took place after weeks of debating between the company’s labour leaders and managers over the pace and scale of cost-cutting plans.
Handelsblatt had previously reported that Volkswagen was close to a deal that could see Diess remain as the CEO. Shares extended gains after the news and closed three per cent higher on the day as one of the biggest gainers in Germany’s blue-chip index.
Volkswagen and Porsche SE, the company’s largest shareholder, declined to comment on the situation.
Diess’s future has been in serious question since he brought up the risk of far-reaching job cuts in September. This complicated the group’s efforts to draw up a five-year investment plan that will be discussed by the supervisory board on Thursday.