HAMBURG — Volkswagen Group’s supervisory board was holding an extraordinary meeting Wednesday to discuss a contract extension for CEO Herbert Diess, Handelsblatt business paper reported, citing sources close to the executive.
Diess is demanding the board’s backing so he can continue to reform the automaker, including implementing cost cuts to free investment for improved software to close the gap with Tesla and for future autonomous technologies, the paper said.
VW’s labor leaders, who hold half the seats on the board, are blocking Diess’s plans, according to the report.
VW management sources told Handelsblatt that Diess has lost the support of his top executives. “People are not following him any more,” one source told the paper.
Senior executives are fed up with Diess continually saying in the press that Tesla is better than VW, the paper said.
Diess wrote an opinion column in Handelsblatt last month in which he referred to the German industrial giant as still having “old, encrusted” structures that must be broken up.
The supervisory board has sought to avoid a discussion about the contract extension. The board feels it is too early to consider the matter because Diess’s current contract runs until April, 2023.
But Diess is forcing the issue, prompting the board to hold a meeting on Wednesday ahead of its scheduled meeting on Thursday, Handelsblatt and Reuters reported earlier on Wednesday.
In June, Diess was stripped of his leadership of the automaker’s core VW brand after internal disputes.
Diess’s attempts to install allies Arno Antlitz as CFO and Thomas Schmall as chief procurement officer on the management board have been opposed by the automaker’s labor leaders, reports have said.
VW was not immediately reachable for comment.
Reuters contributed this report
