Prolongation blunder leads to dismissal of Volkswagen Chief Diess by Porsche and Piëch family
Revised Article:
Let's spill the beans about Volkswagen's shakeup! Here's the lowdown on former CEO Herbert Diess, who stepped down as CEO of Volkswagen Passenger Cars in September 2021, and later departed from the entire Volkswagen Group in September 2022.
Diess's exit wasn't due to a solitary blunder but a chain of missteps that left a bad taste in the owner families' mouths. They pulled the plug on Diess, citing his "flagrant leadership weakness," "lack of diplomatic skill," and "egocentric" nature – straight talk compared to the corporate lingo in the press release.
Sources from the supervisory board revealed that his leadership style was repeatedly criticized. He treated his top managers poorly, even humiliating them in large groups. As a "champion of announcements," he might've been a big interviewer, but his actions didn't back his talk. "The contract extension was a huge mistake. It's better to pull the plug now in the summer than to let it run on,” it was said.
The worker representatives didn't resist Diess's dismissal, and it wasn't surprising. Diess had a tricky relationship with employees and had faced dismissal threats in the past. An internal email leaked to employee representatives in fall 2020, discussing a reduction of 30,000 jobs in Wolfsburg, destroyed trust in Diess.
Adding to the problems was the software subsidiary Cariad. The goal was to create a unified electronics and IT platform, but discrepancies, different ideas from the brands, and compatibility issues plagued the project. It should've happened earlier, but Diess stumbled at the software project.
Despite his departure as CEO, Diess remained the top earner on Volkswagen's payroll. According to credible sources, he will continue to receive his fixed salary of around €2.2 million per year until his contract ends in 2025, without having to work for it.
Sources:
- Bloomberg
- Autocar
- What was the reason behind Herbert Diess's departure as CEO of Volkswagen Passenger Cars in September 2021, followed by his departure from the entire Volkswagen Group in September 2022?
- Who was criticized for his leadership style by sources from the supervisory board?
- In what respects were Diess's one-on-one interactions with his top managers and employees perceived to be?
- What was the nature of the internal email leaked to worker representatives in fall 2020 that affected trust in Diess?
- What were the main issues that plagued the software subsidiary Cariad under Diess's leadership?
- Despite his departure as CEO, how much is Herbert Diess expected to receive in fixed salary until his contract ends in 2025, and will he have to work for it?
