VW supervisory board seeks ways to defuse leadership stand-off

FILE PHOTO: Volkswagen Group CEO Herbert Diess attends a construction completion event of SAIC Volkswagen MEB electric vehicle plant in Shanghai

HAMBURG (Reuters) – Volkswagen pledged to continue talks among its key stakeholders on Wednesday following a meeting of the company’s supervisory board, as the world’s largest carmaker seeks ways to defuse a leadership crisis.

The meeting of the board of directors was convened after Chief Executive Herbert Diess demanded a contract extension and more backing for his reform efforts, some of which had been opposed by the company’s powerful labour chiefs.

“Talks between the participants continue in a constructive manner,” the supervisory board spokesman said in a statement.

“Decisions were not made in today’s meeting, as expected.”

Diess has sought to shift VW from being the world’s biggest maker of combustion engined vehicles into a company capable of mass producing electric and increasingly autonomous cars.

The pace and depth of his reforms, including efforts to lower costs in Germany and to transform Volkswagen into a tech company, has led to clashes with labour leaders eager to protect local jobs.

Diess and the unions clashed over key issues including appointments to the management board, and whether to extend the CEO’s contract beyond 2023, the sources said.

Volkswagen is less efficient and has higher costs than key rivals and Diess has argued that costs must come down to free up resources for high-tech cars.

VW Chairman Hans Dieter Poetsch has lobbied to avoid a discussion about the contract extension, on the grounds that it is not pressing until nearer 2023, when it is due to expire, people familiar with the matter said this week.

Volkswagen’s labour bosses, who control half the seats on the carmaker’s supervisory board, are likely to oppose a contract extension for Diess, plunging it into crisis.

The management stalemate has also seen Diess encounter opposition to his efforts to replenish the management board.

Diess has attempted to install Arno Antlitz as chief financial officer to replace Frank Witter, who is due to retire in June, and to hire Thomas Schmall as management board member responsible for components, replacing Stefan Sommer, who has already left the company, sources told Reuters.

The appointments had been delayed because VW’s labour leaders had insisted on approving a “package solution”, two people familiar with the talks told Reuters last week.

“We are cautiously optimistic that we will be able to discuss a comprehensive proposal,” another source said on Tuesday.

(Reporting by Jan Schwartz; Writing by Edward Taylor; Editing by Alexander Smith, Kirsten Donovan)