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Volkswagen's Diess to remain CEO, but with fewer powers - sources

Volkswagen's Diess to remain CEO, says source
Volkswagen's Diess to remain CEO, says source   -   Copyright  Thomson Reuters 2021
By Reuters

By Jan Schwartz

HAMBURG -Volkswagen CEO Herbert Diess will likely stay on to lead Europe’s largest carmaker as part of a solution that will see him cede some responsibilities following a clash with labour leaders, two people familiar with the matter said.

The solution would potentially end the carmaker’s latest leadership tussle, which has caused uncertainty among investors and led the group’s preferred shares to fall significantly in recent weeks.

After protracted 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.

VW brand chief Ralf Brandstaetter is slated to join the management board – confirming what sources told Reuters last month – while Diess will focus on strategy, the sources added.

Diess already ceded responsibility for the Volkswagen brand to Brandstaetter last year after weeks of squabbling between the company’s powerful labour leaders and managers over the pace and scale of cost-cutting plans.

Handelsblatt had earlier reported that Volkswagen was close to a deal that could see Diess stay on. Shares extended gains after the news and closed 3% 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.

Diess’s future has hung in the balance since he mentioned the risk of far-reaching job cuts in September, complicating the carmaker’s efforts to draw up a five-year investment plan that will be discussed by the supervisory board on Thursday.

Diess struck an upbeat tone at a managers’ meeting last week, stating that negotiations with unions were going well.