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The next head of Volkswagen? New car failure or replacement fuse

Publish Date: 2020.06.06

Mr Bloom may be next at the helm of VW, but for all the managers who work for the carmaker, he is likely to be the next Diss, or the next Murren.


History does not repeat itself, but it often rhymes.


Three years after taking over as vw's new chief executive, HerbertDiess, a cost-killer who often smiles like a Bavarian gentleman, may have been forced out early by his predecessor, Matthias Muller.

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At the end of May, German media first broke the news that The porsche and Piech families, which are major shareholders in the company, had rejected Disney's application to extend the contract until 2025, sparking speculation that the company's tenure was coming to an end. It is understood that the Volkswagen group has been increasingly critical of the company, the new golf and ID.3 software technology problems, as the head of the company is to blame.


In just over a week, it was reported that Oliver Blume, Porsche's chief executive, was about to be replaced as head of the VW brand and lead production of core products such as VW'S ID.3. Insiders say this is "part of a huge management shake-up at Volkswagen", which means a new round of senior management turnover may be announced in the near future.


That seems to send a clear signal to the industry


A successor to Mr Dees has emerged.


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Diss anxiety



Diss's tenure may be coming to an end, though it has continued to simmer in the industry as a result of recent reports. But since 2019, complaints from the VW group's board, particularly from the Porsche and Piech families, have frequently appeared in the comment sections of European car forums and popular websites.


Although these rumors have been hard to hammer out, the group's "embarrassment" in the past two years is also obvious, its most vulnerable to criticism within the Volkswagen and the industry, the key products of the new golf and pure electric fist model ID.3 mistakes.


Diss has been stressing that the eighth generation golf is vw's "most hardcore product", but the European car giant has been struggling with a series of ticket sales and software problems.



In mid-May, it emerged that deliveries of the Golf 8 had been temporarily halted due to a software problem related to the eCALL (Emergency Call) electronic Call that has been mandatory on cars for sale since 2018 by the European Union.


In fact, this isn't the first time the new golf has encountered software problems, including delays due to software updates and secondary interface controls. According to vw's product plan, the new car was supposed to be unveiled at the Frankfurt Motor Show in September 2019, and it was planned to produce 100,000 cars in 2019. However, due to software problems, the launch date was delayed to October, and the total number of cars produced in 2019 was less than 8,400, far lower than the group's expectation.


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Another tricky problem is ID.3.


Since the delivery of this critical model, VW has struggled with a number of software problems stemming from the "haste" of the development of the basic architecture of the ID.3 software, which caused many parts of the system to be incompatible with each other, leading to flashbacks.


The company is anxious because its core products are hampered by problems such as software.


At the group's executive web conference in April, Deese urged the company's leadership to come up with a solution that would match the long version of Tesla's software. By Deese's own admission, Tesla has a competitive advantage in electric cars, and its advanced software system is already a threat to Volkswagen.


Tesla's advanced driving-assistance capabilities have put The company on high alert and told executives not to take it lightly. According to Deess, Tesla is the only car maker in the industry with advanced software systems that are constantly being improved. Integrating powerful software systems into the latest models is more of a problem for Volkswagen than the charging problems of pure electric cars.

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The work and mistakes of cost killers


Looking back on his career, Mr Dees spent his early years at parts giant Bosch before joining BMW and was once seen as the company's most promising successor. Mr Deas left BMW as head of research and development in 2015 at a sensitive time and was widely seen in the industry as having joined VW because of the hopelessness of his successor as chief executive, Norbert Reithofer.


Mr Dees joined the vw group as chief executive of the VW brand and took over from Mr Mullen in 2018. At the critical juncture of the "elephant's turn", Dees and Mullen, similar in many ways, wanted to make radical changes to VW and to push for cost-cutting and efficiency improvements internally



In fact, His ability to be a cost killer was already evident at BMW, and in his two years on the wolfsburg throne at Volkswagen. In addition, he has promoted the following changes since taking the helm of new Volkswagen:


The first is the integration of business segments.


In the first half of 2018, diss established six new business areas and China regions for the group, and divested its 12 brands into three new automobile brand groups of mass production, luxury and super luxury. Among them, the volume brand group includes Volkswagen, Skoda and Seat, three major brands and commercial vehicle brands, while the luxury brand group is relatively single, namely Audi, while the ultra-luxury brand group includes Porsche, Bentley, Lamborghini and Bugatti.

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The second is to strengthen the importance of the Chinese market.


The second half of 2018, Volkswagen group management board members, Volkswagen group (China) 's President and CEO of sea, retired, the two big job title has been split, Edith yourself headed, head of China's management board, become multinational automakers head straight the first China (now, Toyota President akio toyoda is substantial Chinese business leader).


The third is all in electrification transformation.


Diss was a fan of electrification even when he was serving BMW, and he gambled $7 billion to become the head of Volkswagen, building the group's two electrification platforms, the MEB and the PPE, and later pushing the ID. Family, making Volkswagen one of the most radical automakers in electrification transformation.


Of course, these are also two sides of the same coin. Electrification transformation, how to grasp the fast and slow, between technological innovation, compliance and maintaining the main business of fuel vehicles is still the biggest test for global car companies.


Volkswagen has adopted a more aggressive all in strategy, which has received mixed reviews in the industry. On June 3rd, Julian Blissett, GM's global executive Vice President and President of GM China, once again emphasized gm's firm determination to electrify its transformation. In the next five years, they will invest more than 50% of their resources in this field. It is hard to say whether all in electrification will be a failure, as even the more conservative Toyota picks up speed after 2019.


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Of course, being involved in the Volkswagen diesel scandal, although not leading, but it also indirectly become a negative asset in the career of Dees. This past May, Volkswagen agreed to pay 9 million euros, or about 70 million yuan, to settle with a German court to end legal proceedings against its chairman, Hans Dieter Poetsch, and Diess.



The move comes after Dees was accused of concealing the impact of cheating on diesel emissions tests on the market and dragging its feet in informing investors of its wrongdoing. So far, the diesel emissions scandal has cost Volkswagen more than 30 billion euros in damages and regulatory fines, mostly collected in the United States.

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What kind of CEO does VW need?



In fact, the root of the public malaise is behind the scenes.




Mr Mullen, who was chief executive of porsche when vw's diesel emissions were exposed in the US in September 2015, has been at the helm of the Volkswagen group. According to internal VW rules, Mr Murren's term is due to expire in 2020, but the "saviour" stepped down in April 2018 after less than three years at the helm.



To understand why, both his accession to the throne and his abdication were the result of manipulation by the Porsche family. Mr Mullen, the world's biggest carmaker and still a family-run enterprise at the heart of modernisation, has finally hit a wall.



The shareholder structure of Volkswagen presents a "triangular" structure:



The Porsche family is the biggest shareholder, with 50.7% of porsche SE; The government of Germany's Lower Saxony holds a 20% voting stake; Germany's IG Metall metal union has 10 seats on the board. The biggest hand, of course, is the Porsche family, which has both the founder and the biggest shareholder in VW.



This hand has been at the heart of most of vw's top upheavals since 2015: Mr Piech, grandson of Ferdinand Porsche, left the supervisory board after a bitter dispute with his Cousins. Nor is Mr Winterkorn a direct casualty. This time the Porsche family is leaning towards Mr Piech's chosen successor, Murren; Murren's departure is still the result of the Porsche family behind the scenes.



Whether he had defeated Winterkorn on stage or pursued an aggressive electric car strategy, Mr Mullen had fought off barriers from conservative management with the backing of powerful backers. But "murren has lost the trust of the Porsche family over the past few months," insiders told Foreign media such as Reuters after his departure.

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So what kind of CEO does VW want?



Mr Mullen's style is typically soft and tough, playing the role of "reformer" at VW, too. He tried to cut vw's diesel business, but struck a blow for some of the top brass of the Porsche family. For vw, too, he is loyal, and the impact of his exploits at that gate will be as profound as the damage done to them by the Emissions gate.


Mullen adopted a frank and open attitude to actively cooperate with the solution of the "emission gate" problem, and minimized the deterioration of Volkswagen's image; Through negotiation and negotiation, compensation expenses should be controlled, and structural reform and decentralization should be carried out to increase revenue and reduce expenditure in response to the huge burden. Despite the setback in its reputation, VW's performance has not really suffered. In 2016 and 2017, it topped the global car sales list for two consecutive years.


Mr Murren's contribution to vw has been mainly to structural reform and the reshaping of the company's culture. Mr Deiss is more focused on electrification and vehicle development.


But that does not mean that Mr Deas lacks a bigger, more cutting-edge strategic plan. Nor does it mean that he lacks the courage of Mr Mullen to take on vw's complex internal relationships by quietly building the business before taking on the Porsche family.



But Deese's current abandonment of his son is similar to that of Mullen, who left office early. If, as the industry guesses, Diss's career in Volkswagen also ends in sadness, the industry may reflect on the fate of the two "reformist" leaders, not only their broken ideals, but also the loss of the car behemoth in the "family" way.

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Key nodes in the electrification transformation, the public has MEB this the most perfect, the largest electric vehicles dedicated architecture, there are more high-end platform for the PPE, and accumulation of traditional fuel vehicle sales scale and fans, although in some areas with tesla emerging manufacturers such as not much advantage, but in traditional manufacturers have walked in the front of the transformation and upgrading.




In The Chinese market, Volkswagen's frequent discounts have led to a decline in brand premium, as well as the emergence of its own brands. The negative cloud of passat collision still hangs over them. In the United States, another key market, Audi of Volkswagen is struggling to compete with other luxury brands at the same level, and its sales dimension has also declined for a time. In the face of new forces like Tesla, the bottleneck of upward breakthrough has always existed.



The root cause is behind the scenes, but the disease is by no means temporary. Carmakers such as Daimler and BMW are now trying to de-familise, but only slowly, rather than suddenly.



Mr Bloom may be next at the helm of VW, but for all the managers who work for the carmaker, he is likely to be the next Diss, or the next Murren.


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