Volkswagen C.E.O. Herbert Diess Sets Sights on Beating Tesla

Volkswagen C.E.O. Herbert Diess Sets Sights on Beating Tesla
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Volkswagen C.E.O. Herbert Diess Sets Sights on Beating Tesla

Volkswagen C.E.O. Herbert Diess Sets Sights on Beating Tesla

Wolfsburg, Germany – In July, when Volkswagen CEO Herbert Dias wanted to congratulate the company for the first half of the year, he posted Video Zipping across the waterway on electric hydrofoil at the company’s headquarters in Wolfsburg, giving a message of thanks to approximately 200,000 VW workers.

Cutting lazy donuts in the water, he said, “I look forward to seeing you again after the holidays and keep working together for the success of VW.”

At a time when Volkswagen was trying to regain lost confidence in the 2015 emissions scandal and avoid the growing threat posed by Tesla, the message was clear: The 62-year-old engineer was not at the top of the hidden business, founded in the 1930s. , But a dynamic mover and shaker, ready to take the revived company to a prosperous future.

Since then, it’s been a tough ride.

Disabled global shortages of semiconductors have slowed VW’s production, leading to a 24 percent drop in third-quarter distribution and a sharp drop in profits, leading to lower stock prices. Workers are increasingly unhappy about the coronavirus (epidemic) epidemic (or epidemic) all over the country (epidemic) being raised by a temporary furlough company to prevent lockouts during epidemics.

Meanwhile, Tesla, VW’s new main competitor, has reached several milestones. Tesla’s stock is valued at over 1 trillion. Its Model 3 recently became Europe’s best-selling car, the first electric car and the first to do so outside of Europe, according to market research firm Jato Dynamics. And 100 miles east of Wolfsburg, Tesla’s new $ 7 billion plant could begin car production in a few weeks.

While Volkswagen workers grumbled about their lack of work, their CEOs continued a steady stream of adventures on social media, riding Porsche e-bikes in the Alps and showcasing batteries in Austria, running one of the company’s electric ID.3 models. Longevity

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But while Mr. Dias, who turned 63 last month, recently had to cut 30,000 jobs in Wolfsburg as the company focuses on producing electric vehicles, labor leaders said workers have seen enough.

“You’re regularly giving us nice photos of your trip, but unfortunately not yet with Semiconductor,” said Daniela Cavallo, Volkswagen’s senior labor representative and member of its supervisory board, at a staff meeting earlier this month. Told Dias.

She said, “Stop speculating about job cuts and find a solution with us.”

Since then, a committee of the supervisory board has been called in to ease tensions between the two sides. There is speculation as to whether Dias’s job will work out. Lists of possible successors began to circulate.

A rare outsider selected from BMW three years ago to lead the world’s second-largest carmaker, Mr Dias (pronounced DEES) was accused of a bilateral challenge: regaining the trust of consumers who turned their backs on VW after the diesel scandal and transforming the company into an electric mobility powerhouse in Europe. Is able to resist growth.

Since taking office, he has sought to open a company known for its insular culture to a wider audience, focusing on the need to develop VW’s own batteries and software. That being said, he doesn’t seem to miss the opportunity to compare Volkswagen with Tesla, often adversely.

“We need a new mindset at Volkswagen AG to compete,” said Elon Musk, Tesla’s chief executive, at a VW manager retreat in October. Dias posted on his LinkedIn page. “We’ve done a lot in the past, Volkswagen is strong in the old world, but there’s no guarantee for a new world.”

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While VW’s employees may be swayed by their boss’s style, many others believe that this kind of blunt strategy is the only way for a traditionally entrenched company (some of its manufacturing facilities are on the local register of historic sites) to compete with Silicon Valley. Start-up

“The one thing that Diess does is positive, it keeps repeating – even if no one in Wolfsburg wants to hear it – Tesla is the benchmark,” said Stephen Bratzel, director of the Center for Automotive Management in Bergisch Gladbach, Germany. “He is using Tesla to put pressure on the company to make the necessary changes.”

But Mr Bratzell warned that Mr Dias needed the support of the company’s workers, whose representatives hold half the seats on the 20-person supervisory board, which appoints and removes officers and decides policy. The other two members, representing the state of Lower Saxony in Germany, which owns 20 percent of the company, voted with the workers.

The situation at Tesla is completely different: Mr Musk has opposed the company’s efforts to bring its workers together.

The recent sales success of the Tesla Model 3 in Europe has hit Wolfsburg hard. This pushed Volkswagen’s main base, the compact golf, to fourth place for decades.

“Tesla ended the golf era with its Model 3,” the headline in the German national daily Die Welt said. “This makes Tesla better than VW,” the nation’s Mass-Circulation Building newspaper said in an article emphasizing the California company’s innovation and speed in bringing new ideas to market.

Mr. Dias frequently emphasizes the performance gap between the two companies. He points out that while Tesla aims to assemble cars at its new plant in 10 hours, it takes workers at Volkswagen’s factory in Zwickau three times as long to produce an electric ID.3 or ID.4. Planned improvements to the plant in the coming year will reduce that production time by 10 hours, but will release twice as long as Tesla’s time.

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This month, Ralph Brandstator, head of the Volkswagen brand division, announced that the company plans to build a new factory for the fast-charging Trinity electric sedan, which will be introduced in 2026. The 1930s-era factory where the first beetles were made is now no less than plant roots for the eighth generation, golf-assembling Volkswagen.

“Within five years, we want to make this place the world’s lighthouse for the most modern and efficient vehicle production,” said Shri. Brandstator said.

The staff welcomed the proposal, which Ms. Cavallo emphasized had been developed with labor representatives in mind to maintain a Wolfsburg-based workforce. But observers pointed out that while the company wanted to prove its agility and speed up its response, the timeline was too long.

“What Tesla has done in two years, Volkswagen says will take five,” Mr Bratzel said, noting how Mr Musk began building his German factory before all the necessary permits were issued – an adventurous gambler who risked a court ruling. Tesla tore down new facilities.

“Established German players need to be able to rethink their process, to find out how it can be faster and more efficient,” Mr Bratzel said. “Tesla is very good at this.”

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