Volkswagen AG CEO Herbert Diess has backtracked a previous statement that hinted toward a reduction of 30,000 jobs in Germany if the automaker did not accelerate its adoption of electric vehicles.
Diess, who has held the position of VW CEO since 2015, could be attempting to salvage his relationship with Volkswagen’s worker’s council. After Diess stated in mid-October that Volkswagen may have to slash 30,000 jobs due to a slow transition to EVs, his future at the German automaker seemed up in the air. In early November, Volkswagen was calling upon its rare mediation committee, which consists of high-ranking officials from Volkswagen and other brands, as well as representatives from large shareholder groups, to determine if Diess would remain at the company. This committee has not met yet.
Now, Diess is backpedaling his statement regarding the reduction in jobs. Diess, 63, said that instead of reducing the company’s headcount at its various production facilities in Europe, the focus needs to remain on being competitive.
“But the primary focus is not on job reduction, it’s about remaining competitive in the new world, with new capabilities,” he said in a video message to employees, according to Reuters.
Diess has focused heavily on Volkswagen’s push to electrification and has been a driving force behind the automaker’s development of electric vehicles. Diess has consistently mentioned Tesla as the leader in the sector and has developed a friendly relationship with CEO Elon Musk, which has resulted in speculation of a future partnership should Diess leave his post at Volkswagen. Now that the sector is becoming more saturated with EV companies and legacy automakers making the transition from ICE to EV, Diess must recognize that it is important to get a leg up on the competition. Tesla has established itself as the leader in so many different categories that many other companies are essentially fighting for second place.
Diess has recognized this for years and has put increasing amounts of emphasis on the fact that EVs will be the driving factor in Volkswagen’s future success. As EVs continue to become more popular in many regions, especially Europe, consumers are indicating that ICE vehicles will only be around for a short period longer. EVs will eventually take over the automotive industry, and it is important to figure out the bottlenecks now rather than later, as it could lead to substantial consequences if the transition is delayed.
It seems that Volkswagen will keep Diess in his position for the time being, but it also seems to indicate that VW is willing to protect its workforce if it feels threatened. Diess is currently under contract with Volkswagen until April 2023.
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