How VW boss Herbert Diess lost power in Wolfsburg

Photo series with 15 pictures

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Then yesterday the big bang: From July 1st, Diess’ former right hand will guide the fate of the main brand. The struck Diess should take care of the general strategy of the group – how long that goes well seems questionable.

Because VW is again in a deep crisis.

Osterloh’s long list of defects

Bernd Osterloh is something like the seismograph in the Wolfsburg group. When the mighty VW works council boss begins to rumble, an earthquake announces itself. It was the same in spring. At that time, Osterloh rumbled unusually loudly that the start of the new Golf had been put in the sand. When the most important VW model was launched last year, only 8,400 units could be completed. 100,000 cars were planned. Osterloh criticized the failure of overly ambitious board members.

Bernd Osterloh: His works councils make up half of the supervisory board at VW. (Source: Susanne Hübner / imago images)

To date, golf has not run smoothly. Not even every second rolls off the assembly line without defects. Software and electronics in particular cause problems.

The situation is similar with the new ID.3 electric car. It should be the Golf of the future, a fresh start for VW, the start of the electrical age. But instead of solving development problems, new ones have been added recently. The software goes crazy here too.

Two such important starts almost simultaneously, plus the realignment of the entire group, coping with the homemade diesel crisis – this is what Diess expected of itself and the company. Not only works council chief Osterloh speaks of excessive demands.

In a confidential letter from February, he lists the shortcomings. But not the defects in the cars. But the group management. Unclear responsibilities, lack of responsibilities, rough management style – the letter is a single general settlement. He goes to the automaker’s board of directors, among other things, two days before an important meeting. And it ends up on the table of Diess. But the big quake doesn’t happen. For now.

Diess knows that his fate now depends on success in golf and ID.3. And from Osterloh. Its trade unionists occupy half of the 20 chairs on the supervisory board. That makes him so overpowering in the VW empire.

Again and again scandals burdened the company.
In March 2019 Diess swears his managers with the phrase “Ebit makes you free” on tight profit targets. Its wording is strongly reminiscent of the lettering “Work makes you free”, which is located on the arch of the Nazi extermination camp Auschwitz, among other things. Diess later apologizes: he did not notice the similarity.
Just a month later Diess says he knows nothing about the catastrophic human rights situation in the Chinese province of Xinjang. He was “proud to create jobs in this region” in which up to a million Muslims are locked up in camps. The company later said that Diess knew the situation on site very well.
And just now the racist Instagram video. The confidence bodies of the German VW plants complain: “For us, the measure is now unbearable.” In the meantime, a state has been reached in which more and more colleagues are ashamed of their employer and partially deny it.

This against the supervisory board

But the problems don’t stop. VW stops delivery of the brand new Golf in May, and even faces a recall. No good news is heard from ID.3 either. This is the news that finally leads to the scandal: in front of thousands of executives, Diess accuses individual controllers of spreading internal information and thus committing crimes. And: In his view, this spread could be assigned to certain supervisory boards. Attendees at the meeting and members of the supervisory body are said to have been shocked by the statements made by the CEO. He had to apologize.

Even without naming a name, it should have been clear to everyone who Diess meant. At that moment, he had finished himself. His dismissal was even discussed in a special session immediately called. Only legal concerns saved his neck, it is said.

The rumbling of Bernd Osterloh: Often it doesn’t just announce a quake. Then Osterloh is the quake himself.

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