Oliver Blume Facing Pressure to Step Down from Dual CEO Roles
Blume is currently the CEO of both Porsche and Volkswagen, but Volkswagen investors feel that he can’t focus on both.
On September 1, 2022, Oliver Blume got a new full-time job. He was named as the CEO of Volkswagen. That is quite an achievement. The problem is Blume already had a full-time job as the CEO of Porsche. And he had no intention of relinquishing that position. So, for the last couple of years Blume has been the CEO for both Porsche and VW. A lot of people today have a full-time job and a side gig. Driving for Uber can be a side gig, but being the CEO of the Volkswagen Group, which has nearly 700,000 employees worldwide is not.
If you have been following along you already know that Volkswagen is a company in crisis right now. That puts even more focus on the CEO. And according to a report by Business Chief Volkswagen investors are putting pressure on Blume to step down from his dual role responsibilities. Blume holds a PhD in mechanical engineering and has been with the Volkswagen Group since 1994. He is clearly a bright man with a lot of experience; however, more people are beginning to question how he can effectively lead two companies.
Volkswagen Crisis
Back in August VW announced that it was considering closing two plants in Germany. If that were to happen, it would mark the first time a VW plant in Germany would be forced to close in the 87-year history of the company. Closing these plants would mean thousands of people would lose their jobs. This touched off a firestorm reaction from local unions as well as the German government. Especially considering that VW has had a job security program in place since 1994 which prevents job cuts until 2029. However, the German economy is teetering on a recession and VW is not fairing well. VW is losing its market share. In China, EV maker BYD is grabbing market share from VW. Over the last 5 years VW stock has lost about one third of its value. That makes it the worst performer among major European carmakers.
This is the type of performance that gets a CEO in hot water. And if investors feel that the CEO is distracted and not able to fully focus on the role, the chants for a change just grow louder. Deka Investment is one of VW’s largest shareholders. Their head of corporate governance is Ingo Speich who asked: “How can he do both jobs in the right way when the automotive industry is in a structural crisis?”
Blaming Blume
Blume is pushing for the plant closures because they are considered obsolete, and VW needs to cut costs in order to become competitive. “Costs at Volkswagen are too high compared to international competition,” Blume told RTL/ntv, adding that the labor costs in Germany are twice the European level. That may be true however, some feel that VW should have been more proactive in developing affordable EVs and hybrid models. Whatever the reason or reasons, VW is in crisis and some are questioning if Blume is the right man to turn things around while he is trying to run two listed companies.
Photos: Porsche
Join the Rennlist forums!
