VW CEO Diess gets contract extended until 2025
Volkswagen extended Chief Executive Officer Herbert Diess's contract to lead Europe's largest automaker until October 2025, backing one of the industry's most aggressive overhauls.
The supervisory board on Friday received an update on the company's strategy on electric and self-driving cars through 2030, saying it's the basis for future growth, VW said. The 62-year-old's current mandate was due to expire in 2023.
"The supervisory board believes that under the leadership of Dr. Diess conditions will be optimal for the continued successful development of the entire company," VW chairman Hans Dieter Poetsch said in the statement.
The fresh vote of confidence marks a victory for the former BMW executive who twice last year unsuccessfully sought an early extension to his contract. Internal tensions were defused in December with a broader agreement among key stakeholders on cost reductions and other appointments of top executives.
Diess, known for a hard-nosed management style, has frequently clashed with VW's powerful labor unions since joining the German industrial giant in 2015, weeks before the company's cheating on diesel-emissions tests was unveiled.
Disagreements spilled into the public arena last year over plans to trim costs and overcome what Diess described as "encrusted structures" at Volkswagen's headquarters in Wolfsburg. The new contract will provide fresh sway for his push to boost the group's software operations and overtake Tesla Inc. as global leader in electric cars.
VW's financial performance backed Diess's case in recent quarters. The manufacturer emerged from the COVID-19 pandemic relatively unscathed and earlier Friday reported strong preliminary earnings for the first half of this year, sending shares higher.
VW's "timely rollout of battery-electric vehicles in 2021 could be a step toward overtaking Tesla's crown in 2023 and catching up on software by 2025, a view the market is only starting to see," Bloomberg Intelligence analyst Michael Dean said in a report. "This is welcome as VW attempts to shrink its valuation gap versus Tesla."
VW plans to provide an update on its strategy through 2030 next Tuesday.