Volkswagen boss says open company culture priority

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Newly appointed Volkswagen Boss Herbert Diess said his top priority is to instill an open corporate culture “that does not suppress dissent, but rewards it”.

Speaking to investors at VW’s annual shareholders meeting in Berlin, Diess said the world’s largest automaker must adopt better compliance principles and expand its whistleblower system if it is to drive the auto industry in a new direction.

“Such openness is important to enable us to deal consistently with issues within our organization,” he said. “Technological change will demand a lot of us. Massive investments are needed. The pressure to adapt is enormous.

VW’s sales and profit margins have increased over the past two years in part due to restructuring efforts in the wake of the diesel emissions scandal revealed in late 2015.

VW’s corporate governance record has long been criticized. Some investors and analysts blame the board’s lack of independence for allowing the emissions scandal, which saw the company inflict more than $ 25 billion in damages.

But VW’s chief executive said the company must continue to decentralize its operations and give more autonomy to individual brands, including Porsche and Audi.

“We have to transform the group from a slow and somewhat cumbersome supertanker into a powerful fleet of speedboats,” he said.

Mr Diess told investors on Thursday that his overriding principle was that “decisions are made at the lowest responsible level closest to operations.”

The idea, he said, was to avoid duplication of work, speed up decision-making and “increase mutual accountability and interdependence”.

He added: “Anything that a brand group can decide should no longer be discussed at the group level.”

A person close to Volkswagen said that the automaker’s management philosophy had, in the past, been too focused on Wolfsburg, leaving little room for decision-making at lower levels.

He compared it to a community that wants a new cycle path by submitting its proposal directly to the European Commissioner.

Mr Diess, a former BMW executive who took control of the VW passenger car brand in July 2015 – just weeks before US officials exposed the diesel emissions scandal – is said to have a management philosophy based on the “divide and conquer” style that he has known from BMW rather than the “control and command” structure that has deep roots at VW.

Investors were enthusiastic about the appointment of Mr. Diess, who has a reputation for being a cost cutter.

The hope is that he can make VW more efficient so that it can meet the challenges of electrification, carsharing and autonomous driving. Mr Diess said Thursday that VW’s motto should be “a lean group driven strong brands”.

Ben Walker, partner of the activist fund TCI, said he was a “big supporter of Mr. Diess” and was optimistic that VW’s powerful unions agreed with his vision.

“We would like to see further improvement in corporate governance, for sure,” added Walker. ” There is still a lot to do. But it’s a good first step.

Mr Diess said VW was firmly committed to becoming the leader in electric cars, pledging to have “the world’s largest fleet of electric vehicles on the road” soon.

Volkswagen has already awarded 40 billion euros in contracts to obtain batteries from suppliers with the aim of being “the automaker that takes the electric car out of its niche and introduces it to the mass market”, he said. -he declares.

The group plans to deploy 25 pure electric models by 2020, as well as 20 plug-in hybrids.

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