FRANKFURT — Volkswagen Group on Thursday moved to quash rumors that CEO Herbert Diess had been sidelined, issuing an unsolicited declaration of support for the executive, who has clashed with the company’s labor leaders over deeper-than-expected cuts.
“The most important message is that the supervisory board and executive committee … are in complete agreement that our CEO Herbert Diess is leading the implementation of our strategy,” CFO Frank Witter said in remarks that were read out on a call with journalists on Thursday.
Witter acknowledged that “smoke emanating from Wolfsburg” was a sign of how difficult it was to balance the interests of various stakeholders at the company.
Diess has for months pushed to lower costs at the automaker’s German operations, repeatedly clashing with labor representatives, who control nine of the 19 seats on VW’s board of directors, known in Germany as the supervisory board.
In June, Diess was forced to apologize to the supervisory board after accusing a member of leaking confidential information to the press.
In the wake of the clash, Diess handed responsibility for managing the core VW brand to internal veteran Ralf Brandstaetter.
“Believe me, his ambition and his urge for rapid and lasting change remain unchanged,” Witter said of Diess on Thursday.
Days after Diess relinquished his direct oversight of the VW brand, the automaker unveiled a raft of other changes that hit a network of external managers that Diess had brought in to increase efficiency at the company.
Volkswagen’s powerful labor chief, Bernd Osterloh, then went on a roadshow to tell investors the automaker has no need for deeper cost cuts in Germany.
In June, VW said Bernhard Maier, chairman of Volkswagen value brand Skoda, and Stefan Sommer, the company’s head of procurement, plus Andreas Renschler, who headed up the trucks division, would leave the company.