Herbert Diess, the CEO of Volkswagen AG, will maintain his post while having less control of the company, the automaker announced Friday.
Diess was set to become the new chairman on a three-year contract upon his appointment in April, but the company took him out of the hot seat after the U.S. Securities and Exchange Commission questioned whether he had lied to investors during his 2017 earnings call in which he said his company had made “progress on our planning issues in the U.S.”
Volkswagen’s response on Friday was to appoint Douglas Rockoff, VW’s lead independent director, as the new chairman. The company said that while Diess has the “equivalent” or equal executive role in the company, he will “focus on leading Volkswagen” and that the board has decided to allocate 40 percent of his time to other responsibilities, including managing a company-wide product performance reporting center and a new strategy center.
“After much reflection and discussion with the executive team, management board members and independent board members, the committee has decided to propose the new structure to the annual shareholders’ meeting in May of next year,” Diess said in a statement.
“In light of the strategic review regarding our portfolio of businesses and the compensation strategy which I had to change a few months ago, I felt that it was important to continue my duties with the same management team. I do this not only out of the need to get on with our business,” he added.
Diess said he would be able to focus on his continuing “social responsibility” by running the company’s “continued social responsibility initiatives” along with a new strategic planning center.
His future had been in question after the release of damning reports by two watchdogs from the German parliament, known as Der Spiegel and BSI, in the wake of its admission that diesel emissions had been manipulated from at least 2009 to 2015.
Diess had originally downplayed the reports, noting they did not “shed new light on matters” related to the scandal but instead “focused on attempts to slander Volkswagen.”
Both Der Spiegel and BSI published their reports at the beginning of July, but tensions between Diess and the companies’ new chairman, Hans Dieter Poetsch, seemed to intensify over time.
For his part, Poetsch had on Wednesday warned Diess that “if he continues not to pay attention to the contents of the separate Der Spiegel report, he will remain without authority. I hereby put our CEO at my disposal.”