FRANKFURT — A leadership crisis at Volkswagen Group will be defused and CEO Herbert Diess will address top managers to map out his plans to overhaul the automaker, reports said.
The managers’ meeting on Tuesday evening is designed to rally VW’s employees and win backing for Diess’s reform strategy for the automaker, people familiar with the matter told Bloomberg.
VW Group’s supervisory board was meeting on Monday evening to discuss tensions between Diess and the automaker’s labor leaders, Reuters reported. The meeting was brought forward from Thursday.
The leadership crisis will be defused by a compromise, sources told Reuters.
Diess has demanded a contract extension and more support for his reform efforts from VW’s stakeholders, but he has met resistance from powerful worker representatives, who hold half of the seats on the supervisory board.
VW Chairman Hans Dieter Poetsch held talks with main stakeholders over the weekend to find a compromise, Reuters reported.
Labor representatives reaffirmed their backing of Diess over the weekend, but said an early extension of his contract that runs until 2023 is not up for discussion.
Audi works council head Peter Mosch, a top labor official on VW’s supervisory board, told the Augsburger Allgemeine newspaper in an interview he believes Diess is ready for compromise.
A previous management conference in June almost cost Diess his job after he accused some supervisory board members of criminal offenses by leaking information to media. He was stripped of direct control of the main VW brand as a result.
VW’s supervisory board last month approved a five-year investment plan that allocates a larger chunk of the total spending worth 150 billion euros ($182 billion) on future technology including electric and self-driving cars.
The management conference and supervisory board meetings are important for VW’s efforts to defuse tension over Diess’s push for faster and more thorough reform at VW.
Reuters and Bloomberg contributed to this report.