VW CEO Herbert Diess has been bumped from that role for the brand, but remains chief for the Volkswagen Group.
Herbert Diess has been replaced as head of the Volkswagen brand, a post he has held since 2015, a move announced by the German automaker just days after a U.S. court cleared the way for new lawsuits targeting the German automaker in the wake of its diesel emissions scandal.
Diess will be replaced by Ralf Brandstaetter, who had been serving as the VW marque’s chief operating officer. But the 61 year-old Diess will retain his job as CEO of the Volkswagen Group, the umbrella organization that takes in an array of brands ranging from entry-level Seat to high-line Audi, Lamborghini and Bentley.
“Ralf Brandstaetter is one of the company’s most experienced managers,” Diess said in a statement. “I am therefore very pleased that Ralf Brandstaetter will be forging ahead with the development of the brand as CEO.”
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The move, which was approved by the VW Supervisory Board on Monday, comes at an extremely challenging time for the “people’s car” brand. Under Diess, VW has been struggling to move past the diesel scandal that has so far cost it more than $30 billion – with additional losses likely as courts in the U.S. and Germany have been making it easier for owners of rigged Volkswagen products to sue the company.
Ralf Brandstaetter has taken over for Diess at head of the Volkswagen brand.
More immediately, both the VW brand and the umbrella Volkswagen Group have been hammered by the coronavirus pandemic which led to production shutdowns of plants all over the world, as well as massive cuts in sales. The auto industry, as a whole, is expected to see sales plunge by roughly 20% this year, to around 70.5 million, according to a study released last week by consultancy AlixPartners. As the world’s best-selling manufacturer, that has hit VW particularly hard.
The company recently withdrew its original earnings forecast for 2020 and said it was not yet able to offer a revised number. In the meantime, Diess has been pressing for substantial cost cuts in Germany, something that hasn’t sat well with the automaker’s powerful union there, IG Metall. Some of those cuts were in the works even before the pandemic as Diess pushed forward with plans to pull back from diesels and focus on electrifying VW’s line-up. All told, that program was expected to cost 34 billion euros, or $38 billion.
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That program came under sharp criticism when VW’s first long-range all-electric model, the ID.3, was found to have major software glitches delaying its sales launch. Similar problems have also impacted the debut of the latest-generation Volkswagen Golf, one of the brand’s most critical product lines.
Diess has made cuts as the company tries get its EVs, led by the ID.3 BEVs, out to the market this year.
Diess joined the VW brand in 2015, after leaving German rival BMW. He was named group CEO in 2018 after his predecessors became embroiled in the diesel emissions scandal.
Brandstaetter has been with VW since 1993. He was head of purchasing prior to become promoted to chief operating officer in 2018. He will assume his new role on July 1.
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The unexpected management shake-up announced on Monday also will see Stefan Sommer, currently VW’s component and procurement chief, leave the company “by amicable and mutual agreement.” The 57-year-old Sommer worked for the German mega-supplier ZF Friedrichshafen before joining VW in 2018.