At VW because of the job crisis, there is a quarrel between the head of the works council and the board of directors Comments (21)
Ever since it was founded on May 18, 1937 (Berlin, Wolfsburg didn’t exist yet) as a child of the Nazi regime’s “German Labor Front”, the genes of the VW Group have been rooted in “strength through joy”, not in the strength of friends. This runs through the company's history to this day.
A dispute between the new head of the general works council, Daniela Cavallo, and CEO Herbert Diess once again reveals the special power of the works council in Germany's largest car company. Diess believed that he could avoid appearing before the works meeting. But Cavallo (Italian for "horse") forced Diess with a harsh reaction to get off his high horse.
We'll get to the details in a moment. But first a reminder: The conflicts between the group management and the general works council are legendary, occasionally even accompanied by sleazy affairs for public entertainment, like in the noughties, when the main actors were general works council Klaus Volkert and VW HR director Peter Hartz.
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Investigations were finally initiated against Volkert and Hartz on suspicion of infidelity or aiding and abetting infidelity. Both ended up in court, the first actually in prison, the second was sentenced to probation and a large fine and lost his board position.
With the onset of the diesel affair in 2015, new conflicts came to light between Volkert's successor Bernd Osterloh and the VW management. The main actor on the board this time was Herbert Diess, who switched from BMW to VW in 2015. On July 1, 2015, the Supervisory Board of Volkswagen AG appointed Herbert Diess to be a member of the Group Board of Management of Volkswagen AG and Chairman of the Volkswagen Passenger Cars brand. Diess was then elected Chairman of the Board of Management of Volkswagen AG with effect from the 13th – goal achieved.
Since then, the relationship between the group management and the general works council has been tense, sometimes to the point of breaking up. Coping with the diesel affair, but above all the transformation and reorientation of the sluggish group apparatus to the age of electromobility and digitization while at the same time enormously increasing profitability and competitiveness, repeatedly created new potential for conflict between the flexible but notoriously conflict-ridden CEO Diess and the gnarled head of the works council, Osterloh, who, like all his predecessors, sees himself as the gray eminence in the VW group management. Sometimes Diess wanted to throw in the towel, sometimes it should be thrown to him. Diess was repeatedly on the brink, but in the end he pushed the brazen group forward.
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But it remained difficult. The Volkswagen Group reorganized the responsibilities for the management of the brand and the Group on July 1, 2020: Herbert Diess was given more freedom for his tasks as CEO. On the Group Board of Management of Volkswagen AG, he will continue to have overall responsibility for the Volkswagen Passenger Cars division and for the Volume brand group. Constant open or hidden, Horst Seehofer would call it "dirty", remained the order of the day in view of the cuts and changes in cost and personnel structures deemed necessary by Diess at Europe's largest group. The works council at Volkswagen already has an extremely strong position by law.
The VW supervisory board promised itself peace in the relationship between Diess and the general works council from the moment when the powerful and square Bernd Osterloh changed sides in May 2021 in order to move to the board of the Volkswagen truck subsidiary Traton as a highly paid HR director with far-reaching powers .
His successor as Chair of the General Works Council of Volkswagen was Daniela Cavallo (46), quiet and petite, with Italian roots, in the spring of 2021. Her father was already employed at VW. The business administration graduate and member of IG Metall Cavallo has been Osterloh’s deputy since the beginning of 2019. According to the Handelsblatt of the time, “the German-Italian should be systematically built up as a successor. She will have a few years to do this.”
And that's what she became, sustainably.
Because the peace in the "Wolfsburg" lasted just half a year, then the power struggle between works council chief Daniela Cavallo and CEO Herbert Diess broke out again openly, the old drama took its course, this time even particularly violently. And this time with Herbert Diess on the losing side.
The starting point was a trip planned by Diess to investors in the USA, which was to take place just as Cavallo had scheduled a works meeting for November 4th, the first after a two-year Corona break. There was a pent-up need for talks among the employees: extensive short-time work also at the main plant in Wolfsburg due to a lack of memory chips and components, partly due to logistical failures; permanently increased rationalization and efficiency pressure on the workforce; Always and everywhere with reference to the competitor Tesla - Herbert Diess' favorite company - who would assemble electric cars in 15 hours, while VW would need twice as long to do it. And finally, there was the open threat from conflict champion Diess that 30,000 jobs at VW were in danger if a lot didn't change as soon as possible: faster decisions, more efficiency, otherwise the situation for the 670,000-employee group would soon be life-threatening. In view of the unbelievable challenges posed by climate change, electromobility and networking that the industry is facing, he is not entirely wrong.
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So there was a lot to talk about at the works meeting, the unrest among the workforce was great and, in addition, there will be works council elections in 2022, a critical date for the incumbent IG Metall works council. The appearance of the CEO was therefore highly necessary to answer questions, especially at a group like Volkswagen. And after all, it would also be the baptism of fire for the new employee boss. Actually, it goes without saying that the CEO appears there.
But it wasn't, conflict machine Herbert Diess canceled his participation, first because a trip to the USA was planned at the same time, then because the notorious provocateur Diess suddenly and unexpectedly invited the works meeting to his own information event on the same November 4th via VW intranet. This should be under the motto: "Employees ask: Herbert Diess answers". According to the invitation, CEO Diess was to answer questions from 200 employees.
For Cavallo, it was an unparalleled affront. Apparently she raged in a combination of Italian grandezza with Osterlohscher blood slides. According to the Süddeutsche Zeitung (SZ October 28, 2021), on the same day that the management board was invited, Cavallo stated in an open letter to her employee clients with unprecedented sharpness: "While the group CEO was surfing on the Mittelland Canal, the bicycle demos in front of the factory gate or the leisurely Hiking tours with his board colleagues gave the impression that everything was going smoothly, the colleagues have been stuck on short-time work almost continuously for months". This is a "dramatic situation that has never existed before". And she went on to write: “Herbert Diess prefers the investors on Wall Street to his own workforce – this behavior is unprecedented in the history of our group and shows once again that the group chairman, even in this crisis, has neither empathy nor a feeling for the situation of the workforce.”
Above all, the parallel invitation of the board of directors against the sacred works meeting made the camel's straw overflowing for Cavallo. The behavior of the employer side is - to put it mildly - boorish, the behavior of CEO Diess, according to "his own script" to push a dialogue event into the appointment calendar instead of appearing at the works meeting, shows that "... Dr. Diess still has no interest in constructive cooperation”. Never in the history of VW has a manager behaved so ignorantly and disrespectfully towards the workforce in times of crisis. It was about self-expression. Above all, the CEO wanted to have the stage all to himself in Wolfsburg (all quotes literally or analogously according to SZ).
Cavallo's message worked, Diess buckled. He canceled both the planned trip to the USA and his own dialogue event at short notice. And promised to appear at the works meeting.
Which promotes the old power structures in the VW Group back to the day. The works council in Wolfsburg was and is still powerful, without its participation and approval any change in the group remains an illusion. And Daniela Cavallo (Italian for "horse") obviously wants to remain a "woman in the saddle" in the future.
The audience can look forward to the next act in the drama.