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November 24, 2021
BERLIN (Reuters) – Volkswagen’s top committee did not make a decision on the future of Chief Executive Herbert Diess at a meeting on Tuesday, two sources with knowledge of the matter said on Wednesday, with one describing talks as “on a knife-edge.”
Diess and the German automaker’s powerful union representatives have clashed in recent weeks over his management style and electrification strategy, after he warned jobs could be lost if the process was not managed well.
“This topic is so hot, it is on a knife-edge. I can’t say anything further,” said one source, who declined to be named due to the sensitivity of the matter.
“As expected, there is nothing new,” a second source said.
Sources told Reuters on Tuesday the supervisory board’s eight-person executive committee would likely need more time to find a compromise that would satisfy all parties.
The ongoing uncertainty over leadership and strategy at Europe’s largest carmaker has left its stock performance trailing behind competitors in the past six months.
Its shares are down 18% since May, compared with an 11% rise at BMW and Stellantis, a 55% increase at Ford, and an 83% jump at Tesla, whose success Diess has frequently raised as a sign of why Volkswagen must transform more quickly towards electrification.
An agreement on the committee – which includes works council head Daniela Cavallo and representatives for the majority shareholder Porsche and Piech families – could depend on whether Diess agrees to change his management style, the sources said.
Sources close to negotiations said a resolution would likely come as part of a package including the announcement of new board members, details on job prospects for employees, and investment plans for the group, Reuters reported on Monday.
(Reporting by Jan Schwartz Writing by Victoria Waldersee; Editing by Mark Potter)
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