Herbert Diess has to vacate his position on the VW executive floor. The controversial top manager has made influential enemies, but without him the group would not be prepared for the future, says Ferdinand Dudenhöffer. In an interview with ntv.de, the car expert also assesses how the “Porsche Gate” will affect Oliver Blume’s successor.
ntv.de: How surprising was the change at the top of the VW Group for you?
Ferdinand Dudenhöffer: It was surprising and not surprising at the same time. The timing was certainly surprising, so close to the factory holidays. But a lot has been brewing in the past few months. So the change at VW did not come out of the blue.
Was the timing chosen strategically?
Two weeks ago, VW laid the foundation stone for its in-house “Salzgiga” battery factory in Salzgitter. Shortly before such an important date, it would have been very surprising. One day after the laying of the foundation stone, that doesn’t make any sense either. Now the factory holidays are in between. Such a point in time gives one or the other the opportunity to sleep on it again and then prepare for the change. That’s better than in the middle of a reporting period.
How important was Diess for VW?
This was awesome and this is awesome. It was a present for VW. Because VW needs big changes. Without Diess, without the fight with the works council, many things would never have gone through. Agreements would only have been aimed at satisfying the works council and avoiding all confrontations. Then VW would live in the world of diesel and plug-in hybrids until 2050. But this has reorganized the group. To do this, however, it was important to enter into conflicts. The conflicts have now led to a change in management, but without them VW would be less sustainable.
What do you mean when you say VW needs big changes?
Look at the group: the constitution is crooked. It was not for nothing that Diesel-Gate came about, and it was not for nothing that the sex scandal of the former works council broke out at the time. VW is not a normal company. That’s the bad thing about VW. Then there is co-determination: 50 percent of the seats on the supervisory board are blocked by IG Metall. You can’t get anywhere at VW without IG Metall, at least in Lower Saxony. There is also this unfortunate VW law that gives the state of Lower Saxony a right of veto and thus overrides the balance. The state government in Lower Saxony, in turn, has a 20 percent stake and depends on the mood of IG Metall. VW is therefore a company in which the voting rights on the supervisory board do not lie with the normal shareholders. In such a situation you have to see where changes can be made.
Was it Diess’ management style that brought him down?
This was too confrontational in many ways. Communication with the works council was often unfortunate. The Porsche-Piëch family has always seen the value of Diess. But he was becoming increasingly unsteady in his chair because he had enemies. His enemies were Daniela Cavallo, chairwoman of the VW works council, and Stephan Weil, Prime Minister of Lower Saxony. Of course, such a mixed situation brings problems, especially when the pressure increases, as with the software division Cariad, which caused clear problems.
Does Blume now have to play the role of reconciler?
VW is a global company, so it’s not just about what’s going on in Wolfsburg. Most profits are made in China. This got the group out of lethargy, it got things rolling. These stones must now be solidified. So it’s good to have someone like Blume who doesn’t have a history of confrontation. Blume now has a great opportunity to stabilize the group. I think the change makes sense because the strategy is being implemented at VW. And when it comes to implementation, you need allies.
What distinguishes flower?
Flower is very cooperative. He is in contact with the employees and has managed Porsche excellently so far. He is very familiar with the Porsche-Piëch family and has known the group for a long time.
Porsche is targeting the IPO for the fourth quarter of 2022. Does the upheaval in the VW group possibly have an effect on this?
It will stay with the IPO. This is important and will be pushed further by Porsche CFO Lutz Meschke. The Porsche-Piëch family has a great interest in continuing the historical work of their ancestors. VW, on the other hand, needs equity for future major investments, so the IPO is a good thing. Another thing is how the leadership of Porsche will continue. If the IPO is successfully completed, I can’t imagine that the VW boss isn’t also the boss of Porsche.
Even before he took office, Blume was criticized for his own statements about a close exchange with Finance Minister Christian Lindner during the coalition negotiations. What is the explosive force of the “Porsche Gate”?
That was of course very unfortunate. But both sides have backtracked sensibly. The representation that Blume regrets his statements was good and correct. He admitted that internal meetings sometimes go too far. This is not the best start, but no permanent damage. The burden that resonates now will dissipate over time. The next episode of the ZDF satirical show “Die Anstalt” will be coming in a few weeks, then there will be a new topic again.
Blume is said to have said that it was thanks to Porsche that the further use of synthetic e-fuels was included in the coalition agreement. So will Volkswagen under Blume increasingly rely on e-fuels?
E-fuels are a niche topic and not marketable. It’s such a Porsche story. For the old 911 drivers, that was an alibi so they could keep driving their car. However, the topic has no meaning for the automobile market. There it goes straight to the battery-electric car. There is no turning back. Blume will continue to implement the electric strategy one hundred percent. He will also continue to push the concept of gigafactories in battery production. The go-ahead for the Group’s first cell factory in Salzgitter has just sounded. How should Blume convey to the works council that he suddenly no longer needs them? That would not be feasible.
What challenges does Blume face?
The first task will be to stabilize the software. Blume has to see how he deals with Cariad, what should be used in cooperation or what is done independently. The problems in this area were the big criticism of Diess and cost a lot of money. Blume will be judged very strongly by this. Then there is the eternal problem of America. Blume must gradually develop a counterbalance to the strong dependence on China. At the same time, VW has to regain its old market shares in China. There have been some losses lately. In addition, the plan to roll out the gigafactories further will be important.
One problem child is sales. What has to happen at this point?
The integration of Europcar into VW Financial Services is a major task. And with this task, tomorrow’s car sales will be significantly influenced. High distribution costs and expensive dealer networks are the sore points of all car manufacturers except Tesla. It is about closing this sore point and Europcar will be able to play a very important strategic role there. So Blume, together with Sales Director Hildegard Wortmann, is taking care of tomorrow’s sales and that means digitization, digitization, digitization.
Can Blume meet the high demands?
Blume is clearly a team player. And a team player works well with his colleagues. When it comes to collaboration at the management level, he will use his ability as a team player to put his team in the right position like a soccer team. In terms of content, in my opinion, Blume will continue to advance Diess’ major strategic plans, with the exception of the software story.
Marc Dimpfel spoke to Ferdinand Dudenhöffer