Herbert Diess keeps job, will steer VW into its electric future

HAMBURG — Volkswagen CEO Herbert Diess will stay on in a slightly modified role, the German carmaker said on Thursday, ending weeks of uncertainty about his future as VW hiked its five-year spending plan for electric cars by about half.

Rolf Brandstaetter, who took over from Diess as head of the core Volkswagen brand last year, will join the board and lead a new division entitled Volkswagen Passenger Cars from Jan. 1, the company said in a statement.

He will also take over Volkswagen's China business from Diess from Aug. 1. However, Diess will take on responsibility for the company's software unit Cariad.

"I cannot complain about a lack of responsibilities — I continue to feel fully responsible for the company," Diess said.

Diess's future had been in doubt following clashes with Volkswagen's powerful labor unions.

Diess' management and communication style, warning of tens of thousands of possible job losses in coming years and frequently highlighting the threat of competition from Tesla, angered the carmaker's works council, prompting weeks of negotiations over his future at the firm.

At a news conference on Thursday, works council head Daniela Cavallo said it was happy with the outcome of negotiations.

"I have no interest for us to have these conflicts in public," Cavallo said. "The conclusions of this planning round are clear: We have a solid and robust plan we can all be proud of."

The company's supervisory board presented its annual update to the company's five-year investment plan, outlining investments of 159 billion euros ($180 billion) — up from 150 billion euros last year — and involving electrifying more of Volkswagen's sites across Europe.

Spending for electric vehicles will be raised by about 50% to 52 billion euros, compared with last year's blueprint.

"We are becoming a battery manufacturer, a charging infrastructure manager, software is playing a more dominant role ... we are developing new business activities with an unbelievable dimension for us," Diess said, adding the company expected to generate 20 billion euros of revenue by 2030 from its battery division alone.

The reorganization of the leadership team would see the Volkswagen Group delegating management of individual car brands to focus on these overarching business areas, Diess said.

The carmaker also confirmed it expected its operating margin to be at the upper end of its 6-7.5% target range for 2021.