How Herbert Diess rebuilds the world's largest automaker

Only then did he visit Schützenzelt on the Theresienwiese, where gentleman managers with mugs of beer, pretzels and hats were seen. In the midst of all this, the leaders of this one, admiring from the friend and the enemy, that he could turn on and off his empathy like another, like a light switch. Diess was in mode that night.

He knows that he must do everything possible to fulfill his mission. The other members of the council must stand not only against their boss and their plan, but also with their hearts. Only then can the greatest conversion be achieved, something a German company has never seen.

The lighthouse operation of the old economy is to turn into a fighting group of the digital era. And in 2023 at the latest, at the end of Diess's term. It is not intended to extend his contract until now.

It's a sprint that not only decides the future of Volkswagen, but also a bit of the future of the German economic model. Until now, Germany has hardly created new digital companies. Either traditional German companies succeed in reinventing themselves, or they say: Game Over for the social market economy.

Digitization is generally considered a challenge that can only be achieved in a culture of egalitarian leadership, where decisions are made in a decentralized manner, where rapid failure is seen as an opportunity and where the intelligence principle by swarming replaces the lone wolf.

It tries the opposite. Scanning and departure, but with the principle of the typical turbocharger Volkswagen: more power is produced better by more pressure.

In order to be able to exercise this, Volkswagen has conquered a huge amount of power in a few months. He oversaw the business committee and the clan of the owners, held the position of chief inspector in the main subsidiaries of the company and provided the key positions of the group with confidants.

Nothing escapes him. Opposition is permitted, but only as long as Diess's requirements are subsequently applied. "Herbert Diess pursues very ambitious goals, which he specifically named," said Oliver Blume, a member of VW's board of directors and head of the Porsche subsidiary. "Everyone knows what he's wearing."

Volkswagen is experiencing a revolution from the top. The three main challenges are: electromobility, autonomous driving and efficiency. The most important instrument of Diess: medium-term planning, which occupies in the Wolfsburg area a position similar to that of Mount Sinai's display panels.

This Friday, starting at nine o'clock, the Supervisory Board decides on concrete steps to be taken until 2023 and the following years until 2028. The chairman of the board speaks to the inspectors about his plans.

This is an investment of around 35 billion euros. Among other things, the money will be used to convert existing VW factories into new electric car factories. This is not what new factories want to build in Eastern Europe or the United States at lower cost but in Germany – where it has better control over them.

In the end, the inspectors will probably release the funds needed for the reconstruction of the Emden and Hanover factories. In Ostfriesland 2022, they are no longer cars "Pbadat", but only electric vehicles. In the future, in the capital of Lower Saxony, predominantly electric models will come out of the production line.

The more than 20,000 employees of the two VW factories benefit from additional protection through the conversion of production into electric vehicles: job security until the end of 2028. Previously, only the Year 2025 was mentioned – a concession to the group of workers of the supervisory board.

Cooperation in autonomous driving

In the medium term, Volkswagen will build about one million electric cars a year. In Zwickau, Saxony, a complete VW power plant is already being rebuilt. In about a year, mbad production will start there.

The battery, which can account for up to 40% of the added value in electric cars, is at the heart of the new business. In collaboration with SK Innovation of South Korea, Volkswagen would soon like to produce battery cells.

Unlike Daimler and BMW, Volkswagen does not want to give up this key skill. With Ford of the United States or Baidu of China, we talk about cooperation in the field of autonomous driving.

The transformation of the large company with about 640,000 employees and 230 billion euros conversion begins. The world leader in burners must become the world leader in electric cars.

In addition, Volkswagen must become a high-tech company that writes itself the software necessary for autonomous driving and other digital services and that reaches the value Apple, Alphabet or Amazon on the stock market. This would roughly correspond to an increase of more than 74 billion euros in the current value of VW on the market.

Finally, be driving again, do not drive anymore: So reads the order of march from the owner to Commander Diess. Six months ago, the owner families, Matthias Müller, predecessor of Piëch and Piëch, sacked and replaced the former director of the VW brand, Diess. They are now counting on him and his new autocracy.

Barely heard, we hear the "cultural change" that the VW car giant had prescribed to Müller. A new business culture without fear should be the consequence of the diesel scandal, the systematic manipulation of emissions, which hit in September 2015. The fraud cost the group more than 25 billion euros and a good reputation.

As CEO, Martin "Wiko" Winterkorn, 71, was formerly responsible for diesel fraud and record sales. A controllable manager who used the insignia of power and rarely tolerated contradictions. Immediately after the "Wiko" years, the first former CEO of Porsche, Matthias Müller, in the role of CEO should score points by turning away from the style of authoritarian leadership.

Sometimes, however, the business looked like a dynamic meeting. Self-reflection costs time. "Everyone should get on the boat, harmony was a must," recalls one of the insiders. Under Müller's successor, Diess, start the boat, although some are still on the dock.

Unlike the baroque Winterkorn sun, this means that well-balanced normality signals are sent. Even the guards at the main plant have to be very careful when their boss gets involved. A few weeks ago, Diess was in the little car "Up" in the morning before eight o'clock at the Sandkamp factory gate there is. Queuing, pbadport control, continuation of the trip.

I am one of you, so the message. Diess on a driver, whenever possible. ? Thank you bodyguards, no On weekends, Diess goes by airliner from Hannover Airport to Munich, and not by plane VW from Braunschweig.

Symbolically, he kept his office on the 13th floor of the VW tower, where his closest allies are. The members of his council must manage without him in the building of the administration of the group, located 100 meters.

Diess's office is always tidy. Clutter is an abomination for him, an employee reports. For Diess, the office is a place of work where it leaves few belongings. An apartment in Wolfsburg, Munich has now found.

The epidemics of cholera are foreign to this, unlike Winterkorn. It speaks softly, but is anything but harmless. "It's almost always ready to attack," says an insider of his environment.

The current campaign against individual mobility and therefore against the car is threatening for life. Herbert Diess, VW boss

After BMW's boss, Harald Krüger, crashed spectacularly on stage in 2015, Diess is left to take the trouble. Anyone who does such work must also have the proper physical constitution. Internally, he sometimes finds quick slogans: "We really do not need these colleagues anymore."

These provocations use him "deliberately" to test the resilience of his environment, says a confidant. This hates slowness, fears and the inhabitants of the comfort zones. Already at the beginning at VW, he announced that every third of the group was inappropriate and that a second third had to really make an effort.

Impatience is a negative aspect of this situation, it stems from the environment of the supervisory board, so it clings again and again. "It takes some people to their limits," he continues. The VW boss certainly shares more than his predecessor Müller, but could take more.

The diesel defender

This gives certainty that during his tenure, major decisions will be made that will decide which auto companies will survive the upcoming innovation boom. The paradox here: it wants to impose the new at Volkswagen and defend it externally at the same time with all the old determination.

As long as Volkswagen has nothing else than the internal combustion engine, Diess must absolutely avoid one thing: that the automobile industry, by bans of driving with diesel and a CO2 control too strict, limits even more the distress .

Thus, Diess has already declared in bursting talk shows ("Anne Will", "Maybrit Illner") three times over the course of a year that German cars are vilified for questioning the measure of nitric oxide and thieves (buses, trucks, boats) Blow more pollutants into the air.

These are brave performances for a German top manager. In their opinion, their communication consultants generally advise against talk shows: the discussion is too uncontrollable, not enough opportunities for differentiated arguments. But a good opportunity to stay behind as a villain who has poisoned children with exhaust gases.

Stronger in this matter

This, however, remains unmoved on the talk show's stools, smiles, can not be provoked and even shows understanding for criticizing the failures of the old leadership. But as far as the man remains hard. No upgrades, no compensation for European customers.

Politics can not always do anything with the VW leader and his penchant for the clear edge. From the environment of Transport Minister Andreas Scheuer (CSU), it is said that the Wolfsburgs have shown themselves with an eternal halt to "Dieselgate" ungrateful.

At VW, on the other hand, there is the belief that the policy still does not understand what the time has come. 100 million jobs at VW and one million additional jobs in the supplier sector could be lost.

To make sure everyone really understands, Diess has recently painted black at a conference for in-house providers. "The current campaign against individual mobility, and therefore against the car, is taking on life-threatening proportions," he said. The chances might be "50 to 50" that the German car industry in ten years still ranks first in the world.

That's the Diess thing: the stronger the pressure, the easier it is to make changes. "I like the difficulty," Diess regularly states during interviews.

But about the use by car has been a bit forgotten that major shareholders have also condemned to ensure better relations with Berlin policy. Volkswagen chief executive Oliver Blume has recently been sent to the diesel summit in Berlin, although Minister Scheuer has specifically invited CEOs from across the company. This led to a term collision as an excuse. You must inform the Minister of Transport.

False and other modesty never rewarded Herbert Diess. He has the irrepressible self-confidence of a successful climber. These parents, simple workers, had come from Salzburg to Isar. Although Munich is his hometown, Diess still has the Austrian pbadport today.

The young man of middle age has climbed the ladder of secondary education and studied automotive engineering and mechanical engineering. After completing his studies, the PhD in Engineering first worked for four years as a research badociate at the Technical University of Munich, before joining the automaker Bosch in 1989 and moving to BMW seven years later later. Here, a promising career has developed, which was rewarded in 2007 by a position of member of the board of directors (subsequent purchases, research and development).

The newcomer has succeeded as a "cost killer". Nobody saved as much money as that. But it was also clear that the uncomfortable, delicate and sometimes enraged manager of the position of leader of the BMW consensus group was out of the question. When Diess approached the 60 year old BMW age limit, VW heard about the growing discontent of the BMW man.

In the summer of 2014, the CEO of the time, Winterkorn, met with Diess, encouraged by the company's patriarch, Ferdinand Piëch. But only a second conversation, shortly before the 2014 Mondial de l 'Automobile, allowed this breakthrough. In December, Diess traveled to Salzburg to sign the contract with veteran Piëch.

To welcome greeted

To start in Wolfsburg as the boss of the VW brand, the news was initially scared by all sorts of rationalization ideas. So much triviality at such high production costs and so much power from IG Metall Diess was not used by BMW. He therefore decided to come into conflict with the powerful Bernd Ostlerloh company committee. At a business meeting, Diess was booed without mercy for his savings plans. The manager then promised to improve – and had the power limit, but had changed slightly.

The dispute with Osterloh gave way to a deliberate alliance as the two men jointly pushed for the overthrow of the short-term general manager Müller. The replacement was originally designed by the Porsche-Piëch owner clan. Conversion under Müller was not fast enough.

The family then brought Prime Minister Stephan Weil from Lower Saxony. Diess himself regularly went to Salzburg to inform the family of the group's development. At each visit, he qualified for the position at the top of the table.

In the end, Diess became General Manager and Osterloh's close confidant, Gunnar Kilian, became Director of Personnel. Since then, Diess and Osterloh have been managing the energy conservation link of stable men. The manager knows that he must take into account the trade unionists.

Thus, Dies moves away from the project to entrust to Alexander Seitz, Acting Financial Director of Audi, the interim CEO. Diess instead called Bram Schot, the favorite of the workers.

A few weeks later, his favorite, Ralf Brandstätter, was also appointed director of operations for the Volkswagen brand. Ironically, the favorite of the employees, Brandstätter, now has to cut costs to meet Diess's requirement of returning sales by 8%. At present, it is a meager four percent.

Besides the employees and the owner's family, Diess has a third power base insured. The instinct and inclination allowed Diess just after his entry into the VW business world in 2015, the proximity of technical development research (TE), the unofficial heart chamber of the society.

Here are the models of the future. And whoever wants to be the boss of any business is better badured of the respect of the engineers of the TE. Bernd Pischetsrieder and Matthias Müller did not find it. Both remained short-term bosses in Volkswagen's history.

Nothing should escape him

Diess has also targeted the supervisory board positions of the Audi, Skoda and Seat group subsidiaries with its closest ally: it also manages the VW brand and, of course, sits on the board of directors of major joint ventures such as joint venture with Chinese companies SAW and BAIC. Nothing should escape him in his own world empire.

Tuesday's weekly board meeting is directing Diess directly and directly. Porsche's boss, Blume: "He sets up clear railings, but also calls for a discussion, and he's convinced by other positions, if you have good arguments for that."

For which you should not take too much time please, because: "It 's just an impatient person," as we call it in its environment. It was also important for him that the crew be as complete as possible. "He does not like someone leaving the room, for example to make phone calls." With this package efficiency, many board meetings take only three hours. Almost five hours were normal.

Unlike his predecessor, Winterkorn, who preferred to surround himself with loyal complaisants, brought some powerful characters to Diess. These are "attacking players" and not Abnicker, says a prominent VW man: "He's looking for exactly who can help him." So took over Stefan Sommer, former boss of the car manufacturer ZF in Friedrichshafen, the purchasing department. Former Opel boss Thomas Sedran is in charge of the commercial vehicle division, which needs a major renovation.

And BMW, the former workplace, CEO Markus Duesmann is advised, initially intended for the post of chief Audi. Outraged by the ex-offenses of the former employee, the Munich rival banned premature release.

However, it is quite possible that a counter-transaction already discussed, then canceled, will be targeted again. He predicts that Duesmann can leave early and that BMW, in exchange for 340 million euros, will take FC Bayern Munich (8.33%), in addition to a premium for the sponsorship deal. This could then save newcomer Duesmann and a half billion in business turnover.

Participation in the record champions will not miss Diess. An exaggerated proximity to the number one sport in Germany is not transmitted by VW's boss. On the site of Wolfsburg, the CEO is already showing his publicity in the stands of the Bundesliga stadium, VfL Wolfsburg. Such a thing awaits the VW staff.

But even in this case, the manager does not abandon his distant and often curved attitude. It is unthinkable that, like Winterkorn, he endures long after the end of the match in the VIP room of Wolfsburg to discuss with the coach the best configuration.

Sporty Diess prefers this with trekking or ski touring in the Alps, which he quickly reached from Munich. In the late '50s, he also started kite surfing. "For that," says Diess, "you do not need a lot of strength," it depends on skills, body control and intelligence.

His private life carefully protects the father of three adult children married to a teacher. After all, we know that he stays in touch with a circle of former BMW executives, whom he has known since his debut in Munich's four-cylinder tower.

Spell with the red Ferrari

The high-speed manager also finds pleasure in the outings with his red Ferrari, the centerpiece of his fleet. The M-HD-458 registration plate refers to his personal initials and the type designation of the rare sports car.

Normally, for Volkswagen executives, the unwritten rule is to move exclusively with the Group's products. However, that does not even mean replacing his Ferrari with a Lamborghini from the Volkswagen collection.

Curious: Diess opened the "Itxaso" tapas bar six years ago in Munich's Glockenbach district, a nightlife area south of the old town, with his wife Irene and son Andreas. For Diess, it is a reminiscence of previous years in the Cantabria region of northern Spain.

At that time, in the 1990s, he ran an alternator plant in Treto for Bosch as a technical director. The mountains there are reminiscent of the fluent speaker speaking the Spanish speaking allgäu. Diess always has a house in Cantabria. Again and again, he travels to his favorite area.

Tesla is the new Toyota

But holidays are not currently possible for Diess. He wants to deliver his masterpiece to the supervisory board this Friday. If all goes as planned, the supervisory board will announce a radical change in the VW world this Friday. 14,000 jobs will be cut by 2020, and that will not be the end result. An electric car factory needs 20 to 30 percent fewer people. Even the mother factory Wolfsburg does not want to spare Diess, but simply to show the company how bad it is.

By 2017, the supervisory boards had approved a total of 34 billion euros for electrification and digitization. The sum is however only until 2022 – it is now roughly until 2023. The next phase is discussed until 2028. It may be a period when Bosch, Conti / Schaeffler or ZF are perhaps no longer key partners of VW, but American giants of computer science who can create new business from the data turmoil.

"Herbert Diess is very well connected in the technology sector," said Porsche CEO Blume. "He uses these connections for Volkswagen." He has met Elon Musk, the boss of Tesla, as well as the board members of Google, Apple and Alibaba.

Dazzling conditions for the single leader to fulfill his five-year contract until the spring of 2023. But a disturbance shakes the idyll: the Braunschweig prosecutor is also investigating Herbert Diess. In the summer of 2015, did he, along with the then CEO, and the Chief Financial Officer, Hans Dieter Pötsch (the current Chairman of the Supervisory Board), informed too late of VW shareholders of the emissions scandal?

Diess, who comes from BMW at the time, rejects any suspicion. But at VW's headquarters is no longer ruled out that the Braunschweig prosecutor next spring could lay charges against the VW boss. According to some information, it seems that Diess attended a meeting and spoke of the "device of neutralization". Officially, Diess only wanted to learn more about diesel fraud a few weeks later.

Long struggle in the fall Stadler

The risk of the reformer taking over the danger remains in the middle of the restructuring of the group. Maybe VW's supervisory board should then decide whether an accused CEO can have a future in the VW Reich. The chairman of the board, after only a year, exchanged again: "This would be the last thing we could need in the current situation," warns a VW official.

In the case of Rupert, Stadler Diess has been fighting for a long time. Former Audi CEO Stadler was arrested in June because of the softening of his intensity as he tried to influence witnesses in the diesel scandal. For a long time, Diess wanted to keep the CEO imprisoned, but he finally made an unfavorable decision. Stadler had to leave at the beginning of October. Diess can not therefore insist on the loyalty of the supervisors to the Nibelung if it is held against him.

Diess enjoys great trust among investors despite her legacy. His appointment was "a new step in making Volkswagen a modern and efficient company," says Arndt Ellinghorst, automotive badyst at Evercore Investment Company ISI. The electric drive will set the Wolfsburg Verbund standards for the sector and help battery technology break through.

Theme: Volkswagen

If he succeeds, Diess will write the history of the management. He then mastered a future challenge for Germany's biggest concern, which can at best be compared to the progression of Japanese manufacturers in the 1980s. Even in this case, some experts have already lost the momentum. German automotive industry. But local manufacturers have succeeded, unlike many Western competitors, to beat the Japanese with their own weapons.

Volkswagen and CO. Quickly adopted new management methods, with which Toyota had revolutionized production and quality badurance. Terms such as kaizen and kanban were soon also used in German car factories to talk. In the end, the three German automakers emerged stronger from this wave of innovations as they had learned to build better vehicles at lower cost.

A fight to his liking

What the industry faces today is an even greater challenge with even greater opportunities for success. New competitors are not only Tesla and Uber, but also Apple and Google. This is the fight, which has the power to define the mobility of the future: car manufacturers – or computer companies.

It's a fight to the taste of a man who likes difficulties.