And Volkswagen indicated it might put together its truck and bus divisions for attainable sale on the inventory market, a significant departure after a long time of empire constructing by earlier chief executives.
Till just lately, bigness for its personal sake was important to Volkswagen’s id. The corporate’s distinctive tradition is pervasive not solely inside its huge manufacturing facility complicated but additionally within the metropolis of 125,000 throughout a barge canal. Volkswagen is Wolfsburg’s dominant employer, the primary supply of tax income, even the proprietor of the native skilled soccer team.
Standing on the firm robotically brings standing in the neighborhood. License plates issued for firm automobiles embody letter codes — understood by everybody in Wolfsburg — that signify whether or not the motive force is a high-ranking Volkswagen supervisor or perhaps a supervisor’s partner.
Volkswagen’s deeply embedded, conformist ethos was seen as a proximate reason for the scandal. It was why nobody challenged the managers who devised unlawful software program to cowl up extra engine emissions, and why nobody reported the wrongdoing to any exterior authorities for almost a decade.
Altering the tradition is certainly one of Mr. Diess’s main duties. It’s successfully a situation of the agreement Volkswagen made with United States authorities to settle civil and legal actions stemming from the emissions wrongdoing. Volkswagen is required to ascertain a stronger whistle-blower system, and be sure that staff imagine they’ll use it.
“Tradition is actually probably the most troublesome job for Diess,” mentioned Ferdinand Dudenhöffer, a professor on the College of Duisburg-Essen who follows the automotive business.
Mr. Müller took over in late 2015 after the scandal grew to become public, however these days appeared to lose momentum. He had expressed frustration with how lengthy it was taking for Volkswagen to maneuver previous the scandal.
Mr. Diess received favor with the Porsche and Piëch households, who personal a majority of Volkswagen’s voting shares, by bettering earnings on the division that makes Volkswagen-brand automobiles regardless of a decline within the variety of automobiles bought.
“He has demonstrated to spectacular impact the pace and rigor with which he can implement radical transformation,” Hans Dieter Pötsch, the chairman of the Volkswagen supervisory board and a confidant of the Porsche household, mentioned in a statement.
However Mr. Dudenhöffer famous that Mr. Diess will nonetheless should take care of the extraordinary energy that Volkswagen employees and native politicians exert over technique.
The State of Decrease Saxony owns 20 p.c of the corporate and has two representatives on the supervisory board. Employee representatives have one other 10 seats on the 20-person board, which means that unions and the state authorities collectively management the corporate.
“There isn’t a stability of energy within the supervisory board,” Mr. Dudenhöffer mentioned.
In an indication of employee energy, the supervisory board on Thursday additionally named a high-ranking labor consultant, Gunnar Kilian, as head of personnel. The board-level place consists of duty for negotiations with unions.
In one other main change, Francisco Javier García Sanz, a Spaniard who has been the board member answerable for procurement since 2001, will retire. Mr. García Sanz exemplified Volkswagen’s desire for managers with a protracted document of loyalty.
Employee management helps clarify why folks in Wolfsburg determine so strongly with Volkswagen. However it would additionally make it troublesome for Mr. Diess to cut back the work drive, a transfer thought of important if Volkswagen is to turn into as environment friendly as its largest rival, Toyota.
The Wolfsburg system has defeated outsiders up to now. The final time Volkswagen had a chief government who had not spent almost all his profession on the firm was when Bernd Pischetsrieder, like Mr. Diess a former BMW supervisor, took over in 2002. Mr. Pischetsrieder was pushed out after about 4 years.