Volkswagen puts on show of unity as it presents new brand chief

[FRANKFURT] Volkswagen told employees on Thursday that new VW brand chief Herbert Diess had been lured by chief executive Martin Winterkorn, a political gesture designed to gloss over any signs of rivalry between the two executives as the carmaker seeks to move on from a damaging leadership crisis.

Mr Diess and Mr Winterkorn's future depends on whether they can deliver on a plan to slash 5 billion euros (US$5.6 billion) in annual costs from VW's brand operations by 2017 and overcome resistance to cost cuts from unions and political leaders.

In a Q&A with Mr Diess published on its internal website for employees, VW conveyed the impression that Mr Diess had been poached from BMW by Winterkorn, rather than departed chairman Ferdinand Piech. "Welcome to Volkswagen Herr Diess. With which arguments did Herr Winterkorn persuade you to move from Munich to Wolfsburg,"the interviewer asked.

Mr Piech, dissatisfied with Winterkorn's performance, had in fact poached Mr Diess in December. Mr Piech was ousted in April after a showdown.

In the online interview, Mr Diess praised Mr Winterkorn's leadership, making clear he would strive to work with him and the company's powerful labour representatives. "I highly value Herrn Winterkorn. Under his leadership the company and the brand developed greatly," Mr Diess said.

In a nod to VW's labour representatives, he also said he would seek to work with the "entire Volkswagen team", but pledged to continue the cost-cutting drive. "We will continue our efficiency programme, to make Volkswagen fit for the future," Mr Diess said.

As head of procurement and purchasing at BMW, Mr Diess's austerity measures helped the carmaker meet profit targets even as the debt crisis sapped demand for luxury cars.

Volkswagen managers have struggled to implement the company's planned 5 billion euros in cuts amid opposition from the company's powerful labour representatives who have intervened to prevent job losses in Germany.

REUTERS