It played out like a power grab in the HBO series, Succession. While the now former VW executive Herbert Diess was off visiting one of the brand’s plant in the U.S., members of the automaking giant’s supervisory board were back in Germany plotting their strategy for how to dethrone him, some four years after he took over the reigns of the group.
That’s according to Bloomberg, which spoke to unnamed sources within the company, who said that the decisive day, when the top committee of VW’s supervisory board determined that Diess’s time was up, was on July 20. They informed him the next day at around lunchtime, just hours after arriving back in Germany.
Although 63-year old Diess, who came in to lead the Volkswagen brand from BMW in 2015 following the Dieselgate scandal, had long feuded with the company’s union representatives, efforts to get rid of the CEO ultimately succeeded when he lost the unwavering support of the Porsche family, which owns a majority stake in the company.
Read More: Herbert Diess Out At Volkswagen, Will Be Replaced By Porsche Boss Oliver Blume
The family, of which former CEO Ferdinand Piech was a prominent member, had long supported Diess’s bold vision for the company, despite his frequent confrontations with others. Ultimately, though, the CEO did not gain enough allies and became increasingly isolated.
“The departure of CEO Herbert Diess should not be a surprise given how marginalized he had become in recent months,” Philippe Houchois, a Jefferies analyst, wrote in a report, per Bloomberg. “The timing is unfortunate and another illustration of dysfunction at VW.”
Momentum to remove Diess really picked up, though, following a spate of recent difficulties. Reports of the discord among top staff at VW have emerged for some time and, in December, the management board was reorganized, stripping Diess of some responsibilities. He was, however, also tasked with leading CARIAD, the automaker’s bold new software unit.
Intended to bring software development for new vehicles in-house, the subsidiary has been dogged by issues. Most recently, reports emerged saying that CARIAD was behind schedule on multiple projects, leading to delays for Porsche, Bentley, and Audi, three of the company’s highest margin brands. Those delays also pushed back the unveiling of major new EVs, like the electric variant of the Porsche Macan, which insiders say is ready to go from a hardware perspective, it just needs the software that it was promised by CARIAD.
Struggling to gain support for his bold EV strategy and now having to deal with production issues, the embattled CEO eventually lost the support of his staunchest allies, the Porsche family. While he was away, then, the supervisory board took the opportunity to look for Diess’s successor. Eventually, Olive Blume became the winning candidate because of his long history within VW and his success with the Porsche brand.
Given 24 hours to respond, Diess reportedly contacted his lawyers and ultimately accepted that it was time to go. The CEO is likely still entitled to be paid for the full term of his contract, through October 2025, which could amount to more than 30 million depending on how the company’s shares perform.