"Mistake in Decision to Extend Contract Leads to Dismissal of VW Boss Diess by Porsche and Piëch Family Owners"
Fired, But Still Gaining Millions: The Downfall of VW's CEO Herbert Diess
Get the lowdown on the shocking ousting of Volkswagen's CEO, Herbert Diess, and find out why top managers are left stunned after a series of mistakes lead to his exit.
In a surprising turn of events, Diess has been shown the door, according to our website's exclusive report. But it wasn't a single blunder that prompted this decision. Instead, a string of missteps over the past few years sealed Diess's fate.
Despite being kicked out, Diess will still be pocketing a whopping multi-million dollar salary for the next three years. Even the powerful VW empire's top managers were taken aback by the sudden news.
The carmaker's official statement presents a rosy picture, describing Diess's departure as a "mutual agreement." Supervisory Board Chairman Hans Dieter Pötsch praised Diess's ability to spearhead deep transformation processes. But the truth is not as sugarcoated. Sources reveal that Diess's ousting was orchestrated by the Porsche and Piëch owner families.
Missteps that Led to the Fall
Diess's termination is not the result of a single mistake but a cumulative effect of a series of missteps he made over the years. His leadership style, characterized by egocentrism and a lack of diplomatic skills, was a major contributing factor. His top managers were subjected to ill-treatment and even humiliation, causing widespread discontent.
Moreover, Diess failed to deliver on his big promises. Despite giving numerous interviews, he failed to back them up with tangible results. Critics feel that extending his contract was a major blunder, and it would have been better to pull the plug earlier.
No Resistance from Employees
Employee representatives did not put up much resistance to Diess's removal, as reported by Business Insider. Diess's relationship with employees has always been strained, and he has faced the threat of dismissal multiple times in the past.
An internal email that destroyed trust in Diess was a significant blow. In the email, Diess discussed reducing the workforce by 30,000 in Wolfsburg, and the order was later withdrawn due to backlash. Employee councils have repeatedly slammed Diess's communication style and felt provoked by him.
Software Subsidiary Cariad's Woes
Diess's troubles were compounded by the issues with Volkswagen's software subsidiary, Cariad. The goal was to create a unified electronics and IT platform for all VW brands to utilize. However, disagreements about development status, differing visions, and compatibility issues marred the project. The software project was supposed to be completed much earlier, but Diess's failings in this area contributed to his downfall.
Final Thoughts
Despite stepping down as CEO, Diess remains the top earner on Volkswagen's payroll. He will continue receiving his fixed salary of approximately €2.2 million until his contract ends in 2025, regardless of his employment status.
Behind the scenes, Diess's tenure was marked by controversy and challenges, including the global chip shortage, strategic decisions, marketing missteps, and internal and external pressures. While Diess's departure might reflect strategic shifts within Volkswagen, it is also a testament to the broader challenges faced by the automotive sector.
Insights- Herbert Diess played a key role in Volkswagen's electric vehicle strategy, but his leadership was surrounded by controversy and challenges.- Diess's departure can be linked to strategic and operational challenges rather than a direct ousting.- Key factors that led to Diess's downfall include his controversial leadership style, marketing missteps, and mishandling of the software subsidiary Cariad project.- Despite being fired, Diess will continue to receive a substantial salary for the next three years.
- What about Diess's removal has the auto industry talking? It's not just a single mistake but a series of missteps over the years, including his controversial leadership style, marketing blunders, and mishandling of the software subsidiary Cariad project.
- CEO Diess, who was known for his role in Volkswagen's electric vehicle strategy, will still be earning a whopping multi-million dollar salary despite his dismissal.
- While Diess's ousting was presented as a "mutual agreement," the truth is that it was orchestrated by powerful figures in the Porsche and Piëch owner families, conclusively leading to his downfall.
- Employees, who have always had a strained relationship with Diess, did not put up much resistance to his removal, as reported by Business Insider. A significant blow to Diess's trust was an internal email discussing a proposed workforce reduction that was later withdrawn due to backlash.
- VW's software subsidiary, Cariad, was another major factor in Diess's downfall. The goal was to develop a unified electronics and IT platform for all VW brands, but disagreements, differing visions, and compatibility issues marred the project, causing significant delays.
