Labor Strife

Dieselgate's Next Victim

Torsten Oletzky-Horst Vennenbernd-dpa BUTTING
Over the past year, the divergent views of brand chief Herbert Diess (l) and works council head Bernd Osterloh (r) have grown increasingly apparent.
  • Why it matters

    Why it matters

    • With its financial house in disarray following last year’s emissions-rigging scandal, the Volkswagen brand is in desperate need of restructuring to bring down costs and usher in a more productive era.
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  • Facts

    Facts

    • BMW’s Herbert Diess was named CEO of the Volkswagen passenger cars brand in July of 2015.
    • Mr. Diess wants VW’s workforce to boost productivity by 10 percent – a target that has put thousands of jobs on the line.
    • The head of VW’s works council, Bernd Osterloh, has spoken out against the cost-cutting strategies favored by Mr. Diess.
  • Audio

    Audio

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When Volkswagen’s top labor official took to the podium in Wolfsburg last week to address the carmaker’s future, more than 20,000 workers turned out to hear him speak. Bernd Osterloh called for constructive talks between his worker’s council and VW managers over how to do away with extra costs and outmoded structures.

“The guarantor of that for us is Matthias Müller, who will attend the discussions as the head of VW,” he said. Even more telling, however, was the name Mr. Osterloh did not mention: Herbert Diess, the real chief of the core Volkswagen brand. The 57-year-old was appointed to the role last year with one mandate – to push ahead with major reforms.

During his speech to workers on Wednesday, Mr. Osterloh said only that talks with the brand’s board had unfortunately not always been constructive. Yet considering his fraying relationship with Mr. Diess, that was putting it mildly.

Over the past year, the two men’s divergent views on what to do with Volkswagen have grown increasingly apparent. When Mr. Diess came on board in July last year, Mr. Osterloh praised his expert knowledge of cars. In turn, the new brand boss praised VW’s co-determination model – which allows labor representatives to engage in high-level decision-making – so long as both partners have the business’s best interests at heart.

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