The long-running manufacturer made public it was separating with its former director Herbert Diess, who stirred anger with his intransigent efforts to electrify the organization.
Frankfurt, Germany: Volkswagen is set to hand over the management responsibilities to the the new chief executive Oliver Blume, tasked with leading the German automobile giant through difficult economic times following several turbulent times under the leadership of Herbert Diess.
It was in the month of July that the legendary manufacturer announced that it was going to quit Diess who sparked anger over his uncompromising efforts to electrify the company.
Blume is the present director of the sports car brand Porsche is taking over the steering wheel in the “really difficult time” for Volkswagen according to Matthias Schmidt, an analyst with a specialization in electric cars.
The Russian invasion of Ukraine has not just added to the supply chain issues caused by the coronavirus epidemic and posed a number of uncertainties about the energy supply across Europe.
Read more Five deals in 300 days: What’s the reason M2P Fintech went on a shopping spree
The financial crisis comes in the same time that Volkswagen is investing hundreds of billions into a massive switch to electric vehicles. It is also creating a string of battery factories all over Europe.
The new boss is also tasked with resolving the ongoing setbacks in the software arm of the company and will be guiding the premium brand Porsche to a difficult entry into the market.
Electric strategy
Diess became the new CEO of Volkswagen in the year 2018, with the intention of turning around”dieselgate,” the “dieselgate” emissions-cheating scandal.
The Austrian’s response was start Volkswagen into a long-distance drive towards electric vehicles, however his style of fighting often ruffled the feathers of the auto maker.
The 63-year old finally fell out of the trust of Volkswagen’s biggest shareholdersthe Porsche-Piech familyand the problems began to resurface in the software division of the group which is headed by its CEO.
Blume, his successor Blume who has been a long-time Volkswagen employees, appears expected to make a more peaceful appearance than Diess who was who was hired as an outsider by the rival BMW.
“Blume is not known as someone who wages wars. He takes less risk than Diess,” Ferdinand Dudenhoeffer director of the Center of Automotive Research, said to AFP.
Following the departure of Diess Volkswagen’s chief financial officer, Arno Antlitz, was called out to assure the company that there was “continuity” at the manufacturer.
However, Blume has indicated that he might be inclined to prolong the life of combustion engines that are old and inefficient by using alternative fuels.
In a recent interview , with the weekly Automobilwoche, Blume said he believed that synthetic fuels could be an “sensible complement of electric mobility”.
In theory, “e-fuels”, made from carbon dioxide, using renewable energy, permit traditional engines to operate with virtually no Net carbon emission.
While Diess was not convinced by the possibility of a substitute for diesel and petrol, synthetic fuels would permit Volkswagen to work in the direction of a future combustion engines.
Blume is unlikely to make a complete U-turn in the electrification strategy proposed in Diess, Dudenhoeffer said.
However, the company could “move a little further away from the purely electric strategy” because of the potential risks of a sudden shift towards battery-powered cars He stated.
Legacies
The end result is that the matter will probably be resolved in Brussels in the European Parliament, where lawmakers have supported the ban on all new electric vehicles beginning in 2035.
Blume could be able to chart a new course in the field of software. In the same way that Diess had led an ambitious push to develop almost entirely inside the company, Blume could be open to working with more outside suppliers.
“It’s a massive profit centre, that’s the reason they want to keep it all in-house,” Schmidt said. Schmidt However, the analyst noted the fact that “you need software people to run a software company, not car people”.
However, Blume was likely to be a strong supporter of Volkswagen’s new focus towards the American market, after several years of struggle after the scandal of dieselgate.
The move will be in line with a decision by Volkswagen to make massive investments in developing and manufacturing their own battery, decreasing its dependence on suppliers from China.
“That could be Diess’s legacy in a way, that and getting the electrification post-dieselgate in motion, those are probably the two biggest legacies to leave behind,” Schmidt said. Schmidt.
