Volkswagen CEO Herbert Diess to be replaced by Porsche boss in big shakeup

In a major shakeup, Volkswagen CEO Herbert Diess will step down as head of the world's second-largest automaker and be replaced by Porsche CEO Oliver Bloom, the company announced Friday.

Bloom will replace Dias as chairman of the board on September 1, the company announced. In a statement, Hans Dieter Pötz, who chairs the company's governance supervisory board, thanked Dice for his service and for his "important role in driving the company's transformation."

It was a surprising development, considering that Dios narrowly escaped being ousted by VW's supervisory board at the end of last year. According to Bloomberg, the German automaker has frequently clashed with unions and other key stakeholders over VW's strategic direction and overall cost-cutting. The company was raising more money through Porsche's initial public offering to help increase its momentum in electric vehicles and software services. (VW is governed by a supervisory board, which delegates various positions to unions.)

In an interview with The Verge editor-in-chief Nilay Patel on the Decoder podcast earlier this year, Dias discussed VW's unique governance structure and how it sets his work apart from others. Automotive CEO.

"It's complicated and requires more alignment and a lot of discussion," he said. "It doesn't allow for random decisions because you have to make your case as to a shared interest in the future of the company."

But as investors continued to express concern about VW's direction, it became clear that Diess's position at the helm of the company was weak. He was hired from BMW in 2015 with the mission of helping restore consumer confidence in the wake of the Dieselgate scandal, in which VW was found installing fraudulent devices on millions of vehicles. Dias himself avoided prosecution for his role in the scandal.

Diess was one of the most aggressive people in pushing the auto industry to adopt electrification, which earned Tesla CEO Elon Musk the respect. (He also briefly tried to tweet like Musk did, but couldn't.) It's unclear what this leadership shakeup will mean for VW's $100 billion investment in electric vehicles.

Diess is said to have intended to catch up with Tesla in the sale of electric vehicles and often imposed new directives on VW employees in that mission. This means the company's production time per vehicle has been reduced from the current 30 hours to 10 hours, which is closer to what Tesla is achieving at its Berlin facility. Factory workers pressed dice to help navigate the industry's biggest woes, such as the semiconductor shortage.

The company has also faced obstacles in its efforts to expand into China, the world's largest electric vehicle market. According to Der Spiegel, earlier this year, the German economics ministry refused a guarantee to cover new investments in China because of human rights concerns.

Bloom has been seen as a potential successor to Dias for years, although it was thought that he would have to wait longer, according to Bloomberg. He joined the company in 1994 and has held positions across its various brands, including Seat, Audi, VW and Porsche, where he has served as chairman of the board (which is similar to the role of CEO) since 2015.