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VW: The abrupt departure of Bernd Osterloh is the end of an era

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VW: The abrupt departure of Bernd Osterloh is the end of an era
Bernd Osterloh, Chief Human Resources Officer at Traton.

The long-standing head of the works council, Bernd Osterloh, has left the board of the VW subsidiary Traton.

For many years, Osterloh was an unchallenged instance of power in the Wolfsburg VW world.

With his departure, an era at Volkswagen ends. The new leadership appears less dominant.

It was a power struggle that fascinated the public for years. VW CEO Herbert Diess against works council boss Bernd Osterloh. The tough manager against the eloquent trade unionist. Diess was on the verge of being thrown out several times, also because Osterloh had mastered all the subtleties in the power struggle. The two were probably more alike than they would admit. Both alpha animals who knew how to use the public stage.

CEO Diess had to vacate his top position last summer. Now it’s over for Osterloh too. Two years ago he was allowed to switch to a board position at Volkswagen’s truck subsidiary Traton for a salary worth millions. A controversial rise. After all, Osterloh was probably the most powerful employee representative in the republic for more than a decade. Many saw his change as a betrayal because he suddenly received a lavish salary in the millions. Now he too has to vacate his post prematurely. Just like Diess, with whom he had fought so massively for years.

The end of Osterloh is also the end of an era at VW: Because the blustering alpha animals at VW have apparently had their day. In background talks, Diess liked to emphasize how annoying he was about this Osterloh and all his employee representatives. In no other German company are the works councils as powerful as at VW. They help determine the corporate strategy, new locations and plenty of personal details. When Diess took up the post of CEO in spring 2018, he thought hard about how he could break the dominance of the trade unionists. Since then, the two have dueled on and off. Sometimes in public, mostly behind the scenes.

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Bernd Osterloh was an institution in Wolfsburg for a long time. After the scandal surrounding brothel visits and luxury trips for works councils, he took over the leadership of the employee representatives in Wolfsburg in the summer of 2005. Osterloh managed the feat of preserving the traditionally strong position of IG Metall despite the explosive affair. From his point of view, the works councils were co-managers who played a key role in the carmaker’s strategy.

Osterloh cleverly expanded the power position of the works councils. He forged a men’s union with the then CEO Martin Winterkorn and the chairman of the supervisory board, Ferdinand Piëch. For years, these three men determined the fate of the global car manufacturer. Nothing happened without Osterloh’s consent, Winterkorn and Piëch knew exactly that.

Up until the diesel affair in autumn 2015, VW’s figures skyrocketed, and the Wolfsburg-based company became number one in the world. Then Winterkorn had to go, Piëch was history a few months earlier. Only Osterloh remained in power. Everything seemed to roll off him.

When Herbert Diess was promoted to CEO in spring 2018, turbulence with Osterloh quickly arose. Diess wanted to break the power of the works councils in Wolfsburg and failed because of Osterloh’s resistance. The trade unionist positioned himself as a kind of last upright fighter against the supposed turbo capitalist Diess. There was a surprising turn in this duel two years ago: Osterloh accepted the offer to become a member of the board of the truck subsidiary Triton and earn a salary in the millions in the future. Diess seemed to have elegantly brushed aside his rival. But now both have lost their jobs.

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It’s the end of an era in Wolfsburg. Because the successors are much less power-driven. The new CEO Oliver Blume is considered a balancing team player who wants to produce as few losers as possible. Exactly the opposite of Herbert Diess. And the new chairwoman of the works council, Daniela Cavallo, would never appear as wide-legged and loud-mouthed as her predecessor Osterloh.

Blume and Cavallo, the new management of VW, has positioned itself completely differently. It is therefore no longer about agreements in the back room, but about decisions that are as transparent as possible. The duel between the CEO and the head of the works council should now be history. In Wolfsburg it is said that it should never go as far as it did with Diess and Osterloh.

The exciting question is: will Cavallo ever get such an outrageous offer as Osterloh? The longtime works council boss changed sides because he was suddenly offered a salary in the millions. A longtime VW manager puts it this way: “The VW people used to get everyone with a lot of money.”

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