Until the end of last week Herbert Diess looked “every inch the modern, global auto titan”, say John Arlidge and Jon Yeomans in The Sunday Times. However, the CEO of Volkswagen was evidently “too brash, too bold and in too much of a hurry for many of the company’s key stakeholders”. VW announced that he had been forced out three years before the end of his contract by a unanimous vote of the carmaker’s supervisory board. The move has upset many institutional shareholders, with analysts calling it “another illustration of dysfunction at VW”.
Diess’s departure was at least partly the result of “a series of public blunders”, says Joe Miller in the Financial Times. These include saying he was “not aware” of detention camps in China’s Xinjiang region and using the insensitive phrase “EBIT macht frei” at a company event. He also gained “notoriety” for his “skirmishes” with VW’s “powerful works council, which controls several seats on the company’s supervisory board”. Unions were particularly “angered” by his suggestion that the group had 30,000 excess staff and his complaints that Tesla employees managed to produce an electric car in just a third of the time it took VW.
Clashes with the workers
Diess’s gaffes and “frequent clashes with powerful worker representatives” may have played a role in his departure, but they were survivable as long as he had “unwavering support” from the billionaire Porsche and Piech family, the majority owners of VW, says Monica Raymunt and Christoph Rauwald on Bloomberg. However, his “key project failures” gradually persuaded the family that “he had to go”. These failures include delays to the “scheduled rollout of important new models, including the electric Porsche Macan SUV” as well as struggles “to muster broader support” to implement a €89bn electric-vehicle (EV) and software strategy.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Still, even his harshest critics acknowledge Diess’ “strategic vision” and his “achievement in transforming VW’s culture for the [EV] age”, say William Boston and Georgi Kantchev in The Wall Street Journal. His emphasis on moving away from fossil fuels “has seen VW’s brands, including Porsche, Audi, Seat... and Bentley develop core electric models with a plan to shift fully to EVs this decade”.
The change at the top “probably won’t derail Volkswagen’s electric vehicle ambitions”, especially since Porsche – under VW’s new CEO Oliver Blume – “has rolled out the successful Taycan model and expects green vehicles to be as profitable as combustion engine cars in two years”.
A “fresh start” may even help Blume persuade the wider company to raise investment in EVs “while improving lacklustre profitability”. But Blume’s appointment could muddy Volkswagen-Porsche’s already complex governance: he will still be in charge of Porsche even though Volkswagen plans to list the luxury brand. If this set-up produces a “greater muddle”, investors “may start to miss... Diess’s gaffes”.
-
Renewable investing: who is paying for the green revolution?Investors in renewables have not been rewarded, says Bruce Packard. Will they fund the government’s plans?
-
UK house prices rose 4.6% last year – where did property prices grow most?House prices increased by 4.6% in 2024, giving an average property price of £268,000. Where did property prices grow the most and will they continue to rise this year?
-
European stocks are ignored and cheap – but possibly not for longNews European stocks are out of favour, with some analysts predicting their worst year since 2008. But the worst of the sell-off could be over, and European value shares in particular look appealing.
-
Ray Dalio’s shrewd $10bn bet on the collapse of European stocksOpinion Ray Dalio’s Bridgewater hedge fund is putting its money on a collapse in European stocks. It’s likely to pay off, says Matthew Lynn.
-
Macron has failed France – but there is still plenty to invest inCover Story Emmanuel Macron won a convincing victory in France's presidential election, but he has no clear vision for halting the country’s decline. Frédéric Guirinec looks at the state of France and picks 20 French stocks to buy.
-
An end to investing in RussiaNews Foreign investors have abandoned Russian markets - and index compiler MSCI could remove it altogether from its stock and bond benchmarks.
-
Russian stocks suffer as the world fears it will invade UkraineNews Despite a booming economy, Russian stocks look extraordinarily cheap – but if it invades Ukraine, the Russian stockmarket will become all but uninvestable.
-
French stocks are back in fashionNews France’s CAC 40 stockmarket index gained 29% in 2021, making it the world’s best performing major market.
-
Has Italy’s economy turned the corner?News Italy’s FTSE MIB stockmarket index has returned 23% so far this year, more than double the FTSE 100’s performance over the same period.
-
Dale Robertson: why Europe is a great place to be a stock pickerPodcasts Merryn talks to Dale Robertson of the Chelverton European Select Fund about the opportunities available to investors in European companies – especially in small and micro-cap stocks.
