Volkswagen unveils new chief, who faces tough hurdles

The “New Man” at Volkswagen under Diess no longer rides off into the sunset. Herbert Diess, who briefly occupied the post of chief executive officer for Volkswagen in 2013, was promoted to the job…

Volkswagen unveils new chief, who faces tough hurdles

The “New Man” at Volkswagen under Diess no longer rides off into the sunset.

Herbert Diess, who briefly occupied the post of chief executive officer for Volkswagen in 2013, was promoted to the job again in January, after the abrupt resignation of current CEO Matthias Mueller a little more than a month prior. He’s thus far had a smooth ascension to the top spot at Volkswagen, but it isn’t a straight path into a long-term position.

Over the course of his tenure at the helm of Volkswagen Group, Diess has had to contend with a series of PR stumbles, including the emissions scandal that broke in September 2015.

A global scandal, it was centered around Volkswagen’s “defeat device” emissions systems, which equipped diesel-powered cars with software capable of deceiving regulators and owners into thinking their vehicle was in compliance with federal emissions standards, when in fact its emissions were significantly above the standard. Even Volkswagen’s compliance officer admitted on camera that the company probably knew about the cheating software years before it was made public.

Apparently being the guy in charge wasn’t doing much for the employee morale inside the automaker. In mid-September, just a few weeks before the diesel emissions cheating scandal was revealed, Mueller resigned abruptly, citing his inability to overcome resistance from “insurgents.” Just ten days later, Volkswagen executive Matthias Muller — also formerly of VW — was named CEO.

But this April, he was replaced once again by Diess, who reports directly to VW’s controlling shareholder, the Porsche and Piech families (itself the current owners of Porsche AG). While at the helm of Volkswagen, Diess’s top priority has been eliminating costly labor costs within the automotive giant.

But his résumé, a graduate of the University of BMW, and a career spent in automotive engineering, wasn’t enough to convince VW’s controlling shareholders to stick with him as the company moves forward in its transformation, a process that is expected to ultimately lead to the sale of its stake in its joint venture in Spain. He did, however, add a bit of company stardust to his resume with his appointment.

There’s little doubt of the results coming of this plan for faster innovation at Volkswagen, and Diess’s star will only rise. But with German governance rules guiding how a carmaker’s top positions are filled, Diess now finds himself in the position of being second-in-command to a powerful (albeit family-run) conglomerate that has been less than hands-off in its relations with its up-and-coming automotive competitor, Hyundai.

Volkswagen has not commented on whether or not this is still the case.

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