New managers

Rattled Audi Shakes Up Board

Audi
Is Audi losing its luster? Source: dpa

Audi is gearing up to replace more than half of its board next month in a bid to reinvigorate itself after a torrid few months. Four out the company’s seven managers will be new to the executive suite, but all are old hands at Audi and its parent company Volkswagen, Handelsblatt has learned.

Peter Kössler, who runs Audi’s production facility in the Hungarian city of Győr, is being tapped to replace the company’s embattled production chief, Hubert Waltl, sources said. Mr. Kössler is already a member of the firm’s non-executive supervisory board, which will sign off on the management reshuffle. The other three people in line for positions on Audi’s board are also company men.

The leadership overhaul has been a long time coming. For two years, the Dieselgate scandal has roiled both VW and Audi, and Audi’s engineers are still picking up the pieces. Most recently, it emerged that the carmakers’ top-end A7 and A8 vehicles were installed with emissions-rigging software. The Porsche Cayenne, which uses Audi’s diesel technology, was also affected.

Audi’s four new board members will be tasked with helping implement a cost-cutting plan.

The ongoing problems have been particularly trying for Mr. Stadler, who has held the post of CEO since 2007. But it appears he still enjoys the confidence of his VW bosses. Though his contract with the VW group is due to expire in 2019, Audi’s supervisory board voted unanimously to extend his leadership for another five years. 

Instead, executives are being shifted just below the top brass. Wendelin Göbel, who is said to be poised to take charge of human resources, is a close ally of VW chief Matthias Müller and a former classmate of Audi boss Rupert Stadler. He is expected to succeed Thomas Sigi, who has fallen out of favor. The sales department will reportedly be headed up by Bram Schot, currently VW’s chief of commercial vehicles. Alexander Seitz, another VW hand, is said to be replacing Axel Strotbek as Audi’s next chief financial officer.

Mr. Stadler and Mr. Müller are keen to put the new team in place by mid-September, before the IAA Frankfurt auto show – Germany’s biggest showcase for the industry. Originally, the plan was to wait until the end of next month, but as one source at the company put it, “we want to avoid deadlock at the IAA.”

FILE PHOTO: Audi CEO Rupert Stadler gives a speech at the company’s annual news conference in Ingolstadt
Sales are on the slide at Rupert Stadler's firm. Source: Reuters

Dieselgate isn’t to blame for all of Audi’s headaches. In the first half of 2017, sales were down 4 percent over the previous year, just as competitors BMW and Mercedes were gaining steam. The company’s ambitions in China have also stalled as a result of a falling-out with FAW, its long-term partner in the country.

Discontent is also spreading to its production facilities at home. There have been complaints about the uneven distribution of work, as well as decisions to migrate manufacturing of popular models such as the Q5 sport utility vehicle to Mexico.

Audi’s four new board members will be tasked with helping implement a cost-cutting plan that Mr. Stadler created in collaboration with Audi’s new head of development, Peter Mertens, and strategy chief Roland Villinger. Their goal: to save the company €10 billion ($11.8 billion) by 2022.

By spending less on conventional models – and with the help of its sibling and rival Porsche – Audi is looking to put that money towards the development and production of five new e-vehicles. This pivot toward electric, however, would be a let-down for the hundreds of workers tasked with developing traditional engines for the carmaker.

With an eye toward those leaner times, Audi’s workers are demanding employment guarantees through to 2020.

 

Markus Fasse writes about the auto and aviation industry for Handelsblatt. To contact the author: fasse@handelsblatt.com

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