Another personnel earthquake within the Volkswagen Group.
Text | Qian Boyan
On December 9, 2021, German time, a notice entitled "Volkswagen Group Supervisory Board Strengthens Management Board Team" quietly appeared on the front page of Volkswagen Group's global official website.
Behind this seemingly unremarkable press release, there was another personnel earthquake within the Volkswagen Group.
China business coaching
The most notable of these personnel changes is undoubtedly the promotion of the current Volkswagen brand CEO, Ralf Brandsttter, to the group's board of directors, who will take charge of Volkswagen's passenger car business from the beginning of next year, and who will succeed Stephan W llenstein, the current head of Volkswagen Group China, in charge of china business from August 1, 2022.
Although Feng Sihan, who has been working for the Volkswagen Group for more than 25 years, has held various senior management positions in Shanghai Volkswagen and FAW-Volkswagen since 2004, and has been the CEO of Volkswagen China for more than five years since 2016, rumors that Feng Sihan will be "left" have been circulating for a month.
The crisis in the supply chain of automotive chips caused by the epidemic and the relative lack of sales of Volkswagen's ID. family electric vehicles are all direct causes of Feng Sihan's unstable position.
According to the November sales data released by the Association, FAW-Volkswagen's cumulative sales in the first 11 months of this year reached 1.87 million units, an increase of only 1.4% year-on-year, while SAIC-Volkswagen's sales of 1.105 million units in the first 11 months fell by 18% year-on-year.
Even if Volkswagen can attribute the reason for the sluggish sales to the covid-19 pandemic and the resulting chip crisis, which is a universal box, the ID. family, which has high hopes for the Volkswagen Group, can no longer find a strong excuse for the relatively weak performance in the Chinese market.
According to the original plan, the ID. family's annual sales target in the Chinese market was 80,000 to 100,000, but the actual sales as of November were only 53,300 units. Even group CEO Herbert Diess had to speak out and lower his sales target to 70,000 to 80,000.
Although the monthly sales of the Volkswagen ID. family have exceeded 10,000 units for many consecutive months, compared with Tesla and the new forces represented by "Wei Xiaoli", it is still difficult to satisfy Volkswagen's German headquarters. For the Volkswagen Group, which is accustomed to the "novice village" nest of the European market, it is indeed difficult to exert efforts in the Chinese market where "full-level big guys" are everywhere.
In fact, the change of position of Ralph Brandenstadt alone is enough to show the dissatisfaction of the Volkswagen Group headquarters with the performance of the Chinese market.
According to the promotion mechanism within the Volkswagen Group, Ralph, who is the head of the Volkswagen brand, should still sit at the center of power in the Volkswagen empire after being promoted to the group's board of directors: Wolfsburg, and even the outside world once widely speculated that Ralph would be the next popular candidate for the CEO of the group after Diess left office. However, the Supervisory Board of the Volkswagen Group requested "Noh Officials" to go to the Chinese market to fight the fire after Thursday's meeting. According to the Frankfurter Allgemeine Zeitung in Germany, Ralph himself, driven by his "sense of mission for the group", finally agreed to take over the Chinese market.
Ralph's parachuting into Beijing also means that volkswagen's most relied on the head of the Chinese market is finally directly responsible for the group's directors, and as of now, Volkswagen China's top executive Feng Sihan is not a member of the group's board of directors. It also means Ralph's authority
Bigger than Feng Sihan, even some people in the industry think it will be big
The most powerful CEO in China's history.
According to volkswagen's supervisory board's plan, Ralph will fly to China by August 1 next year and be based in Beijing as a group director.
The price of Dis's stay
Another implication of Ralph's permanent presence in Beijing as a group director is that the powers of the current group CEO, Diess, are further restricted.
Although Feng Sihan does not have a place on the group's board of directors, at least nominally, the director of the group's board of directors responsible for China is Dies himself.
But the power that Diesse has been stripped away in disguise doesn't stop at its China business.
In the December 9 announcement, in addition to Ralph's responsibility for this significant personnel change in the Chinese market, the personnel changes involving the Group's Board of Directors include: As of February 1, 2022, Manfred D ss is responsible for "Compliance and Legal", Hauke Stars is responsible for the work related to the newly established Group Management Board "IT and Organizational Structure", and Hildegard Wortmann has been appointed as a Director of the Group's Management Board, responsible for sales operations.
Among the three new faces on the board, behind the promotion of Hildegard Wortmann, who was once in charge of sales on Audi's board, the sales business that should have been responsible for Diess was also separated by others. The new de facto legal director, Manfred D ss, has always been known for his friendship and old acquaintance with the majority shareholder Porsche family, and has a very cold relationship with Dies himself. Hauke Stars, the third director in charge of IT, was entirely a Volkswagen newcomer parachuted in by an outside company (formerly at Deutsche B rse).
Behind this series of changes in the balance of power of the board of directors is that the supervisory board, represented by the Porsche family, does not want Dies to have too much say in the board.
However, in addition to losing some of its management responsibilities, Dies also regained the management of Cariad, the volkswagen software division, from Audi CEO Markus Duesmann. According to the official statement of the Supervisory Board, Diess will focus more on the strategic planning of the group while reducing its "day-to-day operational responsibilities".
These changes, which seem to be aimed at Dis, can actually be traced back to the contradiction between Dies and the mass union organization earlier this year and Dies' "forced palace behavior" to renew the CEO contract as soon as possible.
Few can deny that since Diess took the helm of volkswagen group, Volkswagen has been more rapid than other international automakers on the issue of electrification. Dees, who is seen as "proud of himself", has repeatedly hoped to renew his contract for three to five years in the early and spring of this year in order to continue to further the second phase of his volkswagen transformation strategy: digital transformation.
However, this behavior, in the context of The deities himself and the union, became an opportunity for the major factions within the group to beat Dees. As a changemaker who looks at Tesla and Musk in all aspects, Diess has repeatedly expressed dissatisfaction with the speed of the Volkswagen Group's transformation and production efficiency, and even plans to lay off 30,000 employees at the Wolfsburg factory. The farce ended with the union's president, Bernd Osterloh, leaving volkswagen.
89 billion euros invested in the future
However, ostrow's departure, even if it can alleviate the contradictions within the group, does not solve the root cause of the contradiction - the future development direction of Volkswagen's Wolfsburg plant.
Daniela Cavallo, the new President of ostrow's Volkswagen Union, has repeatedly stressed that "the production costs of the Wolfsburg plant are among all the factories in Germany, and this should not be forgotten", but it is still impossible to change the fact that the Wolfsburg headquarters is being gradually marginalized.
The Wolfsburg plant, which employs 13,000 production lines, has maintained its position within the Group with a production capacity of 700,000 units per year and the name of the Shenche Golf series production base. But the ship's turnaround and the union's resistance to reform turned the ID family's main factory, Leipzig, out of the blue. The Wolfsburg plant, which has no experience in electric vehicle production so far, not only began to worry about losing its advantage in technology, but also that the Golf 8, which could no longer create a myth by relying on sales alone, could not fully release production capacity.
To this end, after announcing the personnel changes to the Board of Directors, the Volkswagen Group quickly announced a five-year investment plan for digitalization, electrification and connectivity of up to 89 billion euros. The amount of this investment already accounts for 56% of the Group's total investment over the next five years.
One of the most important of these was the electrification of the Wolfsburg and Hanover plants. Volkswagen plans to spend 1 billion euros to build a new plant in Wolfsburg by 2026 to produce the new Trinity series. Until then, the Wolfsburg plant will also absorb part of the ID.3 capacity from the Leipzig plant in 2024.
Another difficult problem, the passenger car factory in Hanover will also benefit from this investment. Previously, the Hanover plant planned to produce high-end electric vehicles for audi, Porsche and Bentley within the group in the next few years. But with Porsche unilaterally announcing its withdrawal from the program, the Hanover plant will be licensed for production ID.Buzz in the future.
In addition, the Volkswagen Group will invest 30 billion euros in digital technologies and autonomous driving in the 89 billion euros investment plan.