BUSINESS
Volkswagen: Oliver Blume takes over as CEO amid struggles with software division
Porsche CEO Oliver Blume has begun his dual role as the head of Volkswagen. Blume is taking over at a sensitive time for the German carmaker, as it tries to pull off a shift to electric vehicles.
Oliver Blume
Oliver Blume is taking over as Volkswagen’s CEO from Herbert Diess
Porsche CEO Oliver Blume began his new role as CEO of Volkswagen on Thursday, taking over leadership of one of Germany’s biggest companies as it tries to make the switch to electric vehicles.
Blume is a longtime veteran of Volkswagen. The 54-year-old from Braunschweig in north-central Germany studied and earned a doctorate in mechanical engineering at the Technical University there. In 1994 he joined Volkswagen subsidiary Audi as a trainee before working his way up the ranks. He then worked at Spanish carmaker Seat before becoming head of production planning for Volkswagen in 2009. In 2013 he joined the management board at Porsche, another Volkswagen subsidiary, based in the south-western city of Stuttgart.
Blume became CEO of Porsche in 2015. He spearheaded the carmaker’s relatively early shift away from diesel engines, investing billions in the project while still managing to generate profits. Controversially, he is staying on as head of Porsche even as he takes on the leadership position at Volkswagen.
Spirit of cooperation
As CEO, Blume wants to cultivate an environment of solidarity and cooperation at Volkswagen, Reuters reported, citing company insiders. Blume is taking over the post from Herbert Diess, who has led the carmaker since 2018. Diess is credited with overseeing Volkswagen’s aggressive shift towards electric vehicles. But he was also criticized for his lack of team spirit, often taking unilateral decisions and having a fraught relationship with the company’s unions. He was also often in conflict with Volkswagen’s advisory board. The 63-year-old, who despite his personal reputation is well respected in the industry, will stay on as a consultant for Volkswagen until the end of his contract in 2025, news agency dpa reported.
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Playing catch up
Blume is taking the reins at a sensitive time for Volkswagen, with the company still making the shift to electric pushed by Diess. Germany’s longstanding auto industry still lags behind innovators like Tesla when it comes to electric vehicles. Getting the company up to speed on digitalization and technology is one major to-do.
Of particular importance will be deciding what to do about Cariad, the Volkswagen Group’s in-house software firm. Cariad is developing proprietary software intended for use in all future Volkswagen vehicle models. But not all stakeholders are on board, and hold-ups with Cariad are said to be one reason for Diess’s departure.
“At VW there are a fair amount of people saying, ‘We don’t need this. Others are doing it better,'” mobility expert Guido Reinking told German news outlet Tagesschau.
Missing target
A key question is whether Blume will orchestrate improvements to the division, or reconsider the strategy completely. Under Diess, Volkswagen had stated a goal of developing 60% of the software for its cars itself.
But the company now expects to fall short of this goal, German daily Handelsblatt reported Thursday, citing industry insiders. This means Volkswagen will be more dependent than planned on external partners.
It’s perhaps fitting news for Blume’s first day as Volkswagen CEO. “We can’t and do not want to develop everything ourselves,” Blume said at an event in May, responding to a question about his software strategy. “We need partners.”
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Date 01.09.2022
Author Kristie Pladson
Related Subjects Volkswagen (VW)
Keywords Volkswagen Group, VW, Oliver Blume, Herbert Diess, Cariad, electric cars
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