VW, fairing well financially, extends contract of CEO Diess
At the end of last week, Volkswagen Group announced an operating benefit of €11 billion for the first half of 2021. At the same gathering, the contract of CEO Herbert Diess was prolonged until 2025. “Deliveries have been resumed solidly in this first semester,” VW Group states. The group also mentions “a very high figure” for turnover but didn’t go into details.
For the same period last year, VW Group registered a loss of €1,5 billion in operating benefit because of the Covid-19 pandemic. But the manufacturer also surpasses its 2019 result for the same period, where it made €8,99 billion of benefit.
Nevertheless, the group expects less optimistic figures for the second half of this year, mainly due to the shortage of semiconductors hurting the entire automobile industry. The pandemic has completely disrupted the supply chains, resulting in bottlenecks in almost every raw material delivery. That has been felt in Germany on the market, too, as it was one of the worst in thirty years.
The Volkswagen Group easily stays the German number one and will publish all financial results for the first half of this year at a meeting on the 29th of July.
Diess stays on
Herbert Diess will remain Chairman of the Board of Management of the Volkswagen Group until October 2025. On Friday, the supervisory board approved an extension of his contract, which previously ran until April 2023.
Last year, Herbert Diess’ request for an early extension of his contract was still rejected by Bernd Osterloh, then head of the works council. Nevertheless, he received “unrestricted support” for the restructuring of the company.
Originally, his contract would have expired in April 2023. However, it was not until his third attempt to prolong it that the contract was extended to October 2025. By doing so, Diess is exceeding the age limit of 65 years that actually applies at VW.
A two-thirds majority in the supervisory board is required for an exemption of this rule. However, according to the specialized German magazine Automobilwoche, this could not be achieved without the consent of the employee representatives.
The Group Executive Board also presented the strategy to the Supervisory Board under the heading ‘New Auto’. By doing so, the Group intends to assert its global leadership role in a mobility world shaped by e-mobility and software.
“Dr. Herbert Diess and his Board of Management team have worked with employee representatives to successfully advance the transformation of the Group over the last few years,” explained Hans Dieter Pötsch, Chairman of the Supervisory Board.
“The Supervisory Board believes that under the leadership of Dr. Diess, conditions will be optimal for the continued successful development of the entire company in the coming years as well, especially because of Strategy 2030.”
“To tap into the new value drivers and ensure profitable growth, the Group is relying on the strength of its brands on the one hand and technology platforms on the other,” the company states.
“Standard platforms for software and vehicle mechatronics are to provide benefits in terms of costs and quality as well as economies of scale in the same way as a cross-brand battery and recharging strategy and a mobility platform,” the company continues.
The entire new strategy will be presented to the public on Tuesday, the 13th of July.