Oliver Blume has been managing the VW Group with a steady hand since September. But now the power struggles in the Volkswagen empire break out again.
According to information from Business Insider, Blume wants to fire the management of the software subsidiary Cariad, and has already informed the top managers concerned. Cariad plays a central role in the automaker’s future.
The premium brands Audi and Porsche in particular have pushed the VW CEO to take the radical step of kicking them out, according to Wolfsburg.
When Oliver Blume replaced the controversial CEO Herbert Diess last September, many in the VW empire breathed a sigh of relief. It was said that peace was finally coming to the group. Because the former Porsche boss Blume, with his balanced, reserved nature, is exactly the opposite of the busy Diess, who repeatedly angered the managers – until he finally had to vacate the top position.
In the first few months, Blume also lived up to expectations. The power struggles, some of which were held in public, have recently failed to materialize. But now the calm in Wolfsburg is over: According to information from Business Insider, Blume wants to throw out the entire management of the software subsidiary Cariad.
These top managers should be fired
Affected are CEO Dirk Hilgenberg, CTO Lynn Longo, CFO Thomas Sedran and CPO Rainer Zugeh. Blume has already informed the top managers of their forthcoming dismissal in the past few days. The supervisory board is to decide on the sacking after the VW general meeting next Wednesday in Berlin.
From the start, Cariad is considered a dispute between the brands
Behind the event, which is unique even for Volkswagen, lies a bitter power struggle. The IT subsidiary founded in 2019 plays a central role in the future of the car manufacturer. More than 5,000 specialists work there on a uniform software platform for all car brands. With Cariad, VW wants to turn into a tech group, reduce the gap to rival Tesla and show that the Wolfsburg-based company can not only build good cars, but can finally get their IT problems under control.
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However, the reality is different. From the start, Cariad was seen as a dispute between the brands, producing mostly negative headlines. It’s all about competency wrangling, schedules can’t be met, there are always delays, costs are exploding. The software debacle was a major reason for replacing Herbert Diess. And for his successor, too, Cariad is probably the biggest construction site in the group.
For Oliver Blume, the Cariad crisis is the first major test
Blume has now opted for the radical solution of kicking out the Cariad board members, apparently also to buy himself time. According to research by Business Insider, the two premium brands Porsche and Audi are said to have previously put massive pressure on the VW CEO. They think little of the work at Cariad, fear further delays in important vehicle models and want to regain their software skills. In particular, Audi development chief Oliver Hoffmann, who also sits on the Cariad supervisory board, is considered the driving force. The fight between the brands has a long tradition at VW.
When asked by Business Insider, a Volkswagen Group spokesman said: “We have always emphasized that we are committed to Cariad. For the Volkswagen Group, the expansion of our software expertise is and will remain an important component for the attractiveness of our products.”
It is true that the Cariad is part of VW’s “10-point plan”. “We are currently analyzing the situation of Cariad and the projects very closely. In this context, we have already made decisions and, for example, arranged the software architectures chronologically. Possible decisions on personnel changes were not made,” said the VW spokesman.
For Oliver Blume, the Cariad crisis is the first major test as CEO. From company circles it is said that Blume wants to quickly fill the leadership and restructure the software unit. A conclusive concept for software development in the group is not apparent. But that would be urgently needed in order not to fall behind in the competition with Chinese car manufacturers and Tesla.
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With the spectacular expulsion, Blume is more or less flattening Cariad within the group, giving in to the pressure of the premium brands and also making the four top managers concerned the scapegoats, whispers are whispered behind closed doors. “The Wolfsburg world of power struggles continued unabated in the Blume era,” summed up one manager.