Volkswagen AG’s board of directors squelched any rumblings about not supporting CEO Herbert Diess by throwing its support behind him publicly, including approving the appointment of two hand-picked selections for top posts at the automaker.
The board signed off on the appointment Arno Antlitz taking over for Frank Witter as the chief financial officer after Witter’s contract ends next June. Additionally, Thomas Schmall is taking charge of a newly created technology division starting Jan. 1, 2021.
Separately, but perhaps no less importantly, the board revealed that the Lamborghini and Ducati brands will remain part of Volkswagen Group in the restructuring while the responsibility for Bentley will be shifted to Audi, effective March 1. The Bentley move was designed to allow the two companies to exploit any synergies in their move toward electrification. The moves are all part of the company’s Together 2025+ strategy.
However, in order to get what he wanted, Diess had to give a little too, dropping his demand that his current contract be extended. The deal is set to run until 2023. This concession was seen as a small win for the CEO’s adversary on the board, Bernd Osterloh, who represents the company’s employees on the board.
Osterloh and Diess have butted heads when it comes to the pace of change currently ongoing at the German automaker. Diess wanting to move faster, Osterloh bristling at anything that eliminates jobs and many of the reforms Diess wants to implement will reduce headcount at the automaker.
“With its decision today, the Volkswagen Group is demonstrating its determination to continue to press forward with the changes in the automotive sector at great speed,” said Hans Dieter Pötsch, chairman of the Supervisory Board.
“At the same time, the Group will continue to actively bring about the successful transformation of the company and its sites. With our forward-looking, solid planning in the transformation and conversion of the sites, we will set an example for the entire sector in the future as well.”
Diess noted that the plans call for the automaker to “rigorously” charge ahead with its plans to put VW at the forefront of electric vehicle technology. The current effort sees the automaker spending $86 billion to get 50 electrified vehicles on the road from all of its divisions by 2025.
U.S. rivals General Motors and Ford have been trying hype their electrification efforts, but their spending $27 billion and $11.5 billion during the same time frame are clearly dwarfed by VW.
During that time, Diess continues to push for cost cuts and the board as well as the works council are now committed to cutting fixed costs by 5% by 2023 while material costs will be cut by 7% in the next two years.