Volkswagen’s announcement that it poached BMW development chief Herbert Diess to run its flagship VW brand puts the 56-year-old manager in pole position to succeed Martin Winterkorn as head of what could soon be the world’s largest automaker.
Winterkorn’s contract runs until 2016, but VW unions want him to stay through the end of 2018. Whenever he steps down he is the most likely person to succeed Ferdinand Piech as VW chairman. That move will hinge on how long Piech, 77, wants to serve.
Diess’s top task will be to put the VW brand on track to achieve a 6 percent operating margin from a current 2.3 percent, while at the same time maximizing employment in Germany, where over 100,000 of the group’s half million staff work.
The VW brand accounts for about 60 percent of volumes but only 18 percent of operating profit (excluding its admittedly large China business, which is not consolidated).
Other crown princes such as Audi CEO Rupert Stadler, Volkswagen sales chief Christian Klingler and Skoda head Winfried Vahland will see Diess’s hiring as a clear sign that none of them has proved himself to be a lock for Winterkorn’s job.
Yet apart from perhaps ex-Fiat manager Luca de Meo, VW has had limited success hiring executives externally.
The last time VW went looking outside Wolfsburg for a new brand chief, it found Wolfgang Bernhard, whose reputation for cutting jobs without consulting first with German unions doomed him at labor-friendly VW.
Of course, VW’s most famous former BMW executive is Bernd Pischetsrieder, who also irked the German works council. Anointed by Piech personally as CEO in 2002, the VW patriarch later called his successor a “mistake that required effort to correct” after removing him in a spectacular coup in 2006 with the full backing of unionists at IG Metall.