Volkswagen Group CEO Herbert Diess will reportedly keep his job after all, though there’ll be some changes.

As reported by Reuters, an undisclosed source close to the matter said the supervisory board have come up with a solution that should help quell tensions with labour leaders.

“It is going in the direction that the dispute will be settled, and Diess will remain CEO,” said the undisclosed source.

Diess will reportedly focus on strategy but keep his job as CEO, while Volkswagen brand chief Ralf Brandstätter will become a member of the management board.

This isn’t the first time Diess has been forced to hand over responsibilities to Brandstätter, following a similar supervisory board meeting in June 2020. Brandstätter subsequently took the reins at the Volkswagen brand on July 1, 2020.

German media reports from November 2021 had said Brandstätter would take over responsibility of VW Group’s “mass-market brands”, including Skoda and Seat, from Diess.

A Reuters report from November 2021 indicated that Diess is backed by the Porsche and Piech families, which hold a 53 per cent stake in Volkswagen, despite pressures to force him out of his position.

“The families continue to back Diess,” said a Porsche SE spokesperson.

“There has been no change in their position.”

Leading up to the company’s delayed five-year investment plan on December 9, it was uncertain if Diess would remain as CEO.

According to German newspaper Handelsblatt in November 2021, the Volkswagen works council expressed a vote of no confidence in Diess, who recently flagged the potential for huge job cuts and production changes as part of Volkswagen’s electric push.

Diess told the Volkswagen board around the same time that up to 30,000 jobs could be cut if the brand doesn’t move fast enough to electric power.

Of particular concern was its plant in Wolfsburg, which is expected to produce a similar number of cars to Tesla’s upcoming Berlin Gigafactory despite having significantly more employees.

In October 2021, Diess expressed admiration for Tesla CEO Elon Musk and had him present to some of Volkswagen’s top managers.

At this stage it’s uncertain if there have been any chances to Diess’ contract following the supervisory board’s negotiations, but it was recently extended to July 2025.

Earlier this year Diess announced the Volkswagen Group plans to develop six battery production facilities in Europe in an attempt to become the world’s top electric vehicle (EV) seller by 2025.

As part of this push, it also announced it’ll replace the existing mainstream MEB architecture and the upcoming high-end PPE platform with the Scalable Systems Platform (SSP).

The change will happen gradually though, with the switchover not due to be completed until around 2035.

SSP will be developed from the bones of MEB and PPE, and will serve as the basis for “models of all brands and segments”.

The first vehicle based on SSP won’t launch until 2024 or 2025 when Audi’s Project Artemis is revealed.

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Jack Quick

Jack Quick is an automotive journalist based in Melbourne. Jack studied journalism and photography at Deakin University in Burwood, and previously represented the university in dance nationally. In his spare time, he loves to pump Charli XCX and play a bit of Grand Theft Auto. He’s also the proud owner of a blue, manual 2020 Suzuki Jimny.

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