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Volkswagen shifts gears with Oliver Blume taking wheel

Herbert Diess and Oliver Blume
Herbert Diess and Oliver Blume

FRANKFURT: Volkswagen on Thursday handed over the reins to new CEO Oliver Blume, tasked with steering the German automotive giant through challenging economic conditions after four turbulent years under his predecessor, Herbert Diess.

Blume, nurtured in house at Volkswagen and the current CEO of premium sports brand Porsche, is unlikely to signal a significant departure from the electric strategy laid out by his predecessor.

The board under "Herbert Diess has done a good job strategically and technologically," Blume said at a conference on Thursday. "We will keep up the current pace and where possible, increase it."

The success of a business is "always the product of a strong team", said Blume, who will head up a trimmed nine-person board.

Diess owed his exit in part to tensions with workers' representatives, riled by his uncompromising leadership style.

As such, Blume takes the wheel at a "really difficult time" for Volkswagen, said Matthias Schmidt, an analyst specialising in electric cars.

Russia's attack on Ukraine has not only compounded supply chain problems unleashed by the coronavirus pandemic, but introduced uncertainties over energy supplies across Europe.

The economic turmoil comes as Volkswagen is ploughing tens of billions into an ambitious switch to electric vehicles, opening a clutch of battery factories across Europe.

Meanwhile, the new boss will also be tasked with sorting out persistent setbacks at the group's software arm and guiding premium brand Porsche to a tricky stock market entry.

Diess took over at Volkswagen in 2018 with a mandate to turn the page on the "dieselgate" emissions-cheating scandal.

The Austrian's response was to launch Volkswagen on a headlong drive into electric vehicles, but his often combative style ruffled feathers at the legacy auto manufacturer.

The 63-year-old finally lost the confidence of Volkswagen's main shareholders -- the Porsche-Piech family -- as problems mounted in the group's software division, headed by the CEO himself.

His successor, Blume, a 28-year Volkswagen veteran, is set to cut a more conciliatory figure than Diess, hired as an outsider from rival BMW.

"Blume is not known as someone who wages wars. He takes less risk than Diess," Ferdinand Dudenhoeffer, head of the Center of Automotive Research, said.

Following Diess's exit, Volkswagen's chief financial officer, Arno Antlitz, was sent out to stress that there would be "continuity" at the manufacturer.

But Blume has signalled that he could be more open to extending the life of old combustion engines with alternative fuels. -- AFP

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