New Broom

Audi interim CEO brings new style to company, after old boss jailed

File: Global Carmakers Brace For Tariff Whiplash
New kid on the block. Source: Bloomberg.

He’s clean and he can sell things. Those are the two outstanding qualifications that the new, interim boss of luxury car-maker, Audi, apparently has. Former sales chief, Bram — short for Abraham — Schot has been appointed to run the company while his former boss, Rupert Stadler, remains in prison in Augsburg, under investigation for his suspected connection to the VW’s diesel-emissions cheating scandal.

Mr. Stadler, who is suspected of trying to influence witnesses in the case, has been suspended from the top job at the VW subsidiary until his name is cleared (or not). And Mr. Schot, the luxury auto brand’s sales chief, was appointed after a crisis meeting in mid-June after his predecessor’s arrest.

As Audi’s sales manager, Mr. Schot is seen as untainted by the emissions scandal, nicknamed Dieselgate, that has plagued the big German car companies for around three years now. And he’s also done a good job as Audi’s primary salesperson. But will it be enough?

One of the first things Mr. Schot did when he was given the job was to write a letter to all Audi staff. “As a company we must do everything we can to put the diesel crisis behind us as quickly as possible,” he noted. Just a few days previously, Audi had sent off the last of the technical documentation required by federal investigators and as far as the company was concerned, the technical side of this dark chapter was now closed; the legal side will continue for some time.

A new vision

Last Thursday, Mr. Schot was onstage at the historic Nuremberg Congress Hall presenting a new vision of the company to around 2,500 of the firm’s management team. The meeting is a biannual tradition that Mr. Stadler used to lead. Often his speeches would be about the future: how to compete with Mercedes, how to enter the e-car race, how to come out on top in 2025. Mr. Stadler, who ran the company for 10 years, saw himself as a confident architect of the brand’s future.

But Mr. Stadler is now officially “on leave.” And Mr. Schot has a different style altogether. Mr. Stadler, 55, was known to stand on formalities and liked his managerial hierarchies. Whereas Mr. Schot, 57, is reportedly more casual and pragmatic; he has tried to inspire feelings of solidarity with unions, managers and sales teams alike and he’s known to have a sympathetic ear. He seems to prefer measurable goals achievable in the near future, rather than lofty visions.

Mr. Schot’s first real job after studying economics in England was with truck company DAF, then he went on to work as a regional manager for Daimler in Italy. In 2011, he returned to Wolfsburg to work for VW, in charge of the sales of the German giant’s commercial vehicles. As a representative for VW’s commercial vehicles he was “the consummate salesman,” one colleague told a Munich-based newspaper. “He even used to sell them heated seating!”

Audi – Bram Schot und Rupert Stadler
Trading places: Bram Schot (left) and Ruper Stadler. Source: DPA

All of which means that, among other things, he had nothing much to do with those pesky diesel engines — it’s hard to find that kind of person at senior levels at VW or Audi at the moment.

At the managerial meeting in Nuremberg, Mr. Schot spoke for around 45 minutes. But it wasn’t about the distant future, it was about tomorrow’s challenges. “2019 and 2020 are going to be decisive years for Audi,” he told his colleagues.

“I promise you, I am there for you,” Mr. Schot said at a meeting of Audi’s works council, in front of 8,000 members in mid-July. “Business as usual is no longer acceptable,” Peter Mosch, chairman of the works council had already said. The works council demanded better oversight from management, he added.

In fact, one of the works council’s most dire, recent criticisms revolved around Audi’s unpreparedness for the institution of new emissions testing standards in Europe. Just as with VW, thousands of new vehicles have been left stranded, unsaleable until they pass the more exhaustive and time-consuming tests — another direct result of the whole Dieselgate scandal. Mr. Schot stepped in and within days, had reached an agreement with Mr. Mosch and his works council. So far his reputation for practicality and for getting things done looks well deserved.

Taking it to Tesla

One of the biggest changes Mr. Schot has made during his first month on the job was to cancel the so-called Audi Summit to be held in Brussels at the end of August. The company was to present its new Etron car there, an electric sports utility vehicle, to compete with Mercedes and BMW for a bigger share of the lucrative, upmarket SUV sales. But Mr. Schot decided that the Etron should simply be launched in San Francisco, right on the doorstep of e-car pioneer, Tesla. It has been described as a bold, confident move and one aimed at recapturing lost market share from Tesla.

After three years of Dieselgate, Audi could do with some boldness and confidence. In 2013, Audi was selling around the same as Mercedes. But now the latter is outselling Audi by 400,000 cars per year and BMW is selling 200,000 more.

23 p15 Audi-01

Audi is also incredibly important to VW. Without the extra money that the luxury subsidiary brings the larger company, any plans for change in the future are redundant. And Audi is already being pushed to raise its 8-10 percent operating profit to 12 percent. That’s a big ask.

So could Mr. Schot remain at the head of Audi beyond this interim period? Are those qualities enough to keep him there?

Whoever wants to run Audi needs to know how to deal with that kind of behind-the-scenes drama. Insiders say that one of Mr. Schot’s biggest problems maybe his reluctance to grandstand. At board meetings, he tends to stay in the background, glasses on his nose, brow furrowed.

And up until Mr. Stadler’s arrest, Audi’s board was still arguing about who would be best for the job. Neither Porsche’s boss or the ex-chief of auto parts supplier, ZF, showed much inclination. Apparently the two families that are the car company’s major shareholders, the Porsche and Piëch dynasties, had wanted Audi financial officer, Alexander Seitz, as interim manager. Additionally the search for a new boss for Audi will continue — it seems highly unlikely that Mr. Stadler will ever be invited back after his “holiday.”

Markus Fasse reports on aviation and the automobile industry from Munich. This story was adapted in English for Handelsblatt Global. To contact the author: fasse@handelsblatt.com 

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