Volkswagen says CEO Diess enjoys full backing from supervisory board

FRANKFURT: Volkswagen on Thursday moved to quash rumours that Chief Executive Herbert Diess had been sidelined by issuing an unsolicited declaration of support, following clashes with the company's labour leaders who resisted plans for deeper cuts.

"The most important message is that the supervisory board and executive committee ... are in complete agreement that our CEO Herbert Diess is leading the implementation of our strategy," Chief Financial Officer Frank Witter said in remarks which were read out on a call with journalists on Thursday.

Witter acknowledged that "smoke emanating from Wolfsburg" was a sign of how difficult it was to balance the interests of various stakeholders at the company.

Diess has for months pushed to lower costs at the carmaker's German operations, repeatedly clashing with labour representatives, who control nine of the 19 seats on VW's board of directors, known in Germany as the supervisory board.

In June, Diess was forced to apologise to the supervisory board after accusing a member of leaking confidential information to the press.

In the wake of the clash, Diess handed responsibility for managing the core VW brand to internal veteran Ralf Brandstaetter.

"Believe me, his ambition and his urge for rapid and lasting change remain unchanged," Witter said on Thursday.

Days after Diess relinquished his direct oversight of the VW brand, the carmaker unveiled a raft of other changes which hit a network of external managers that Diess had brought in to increase efficiency at the carmaker.

Volkswagen's powerful labour chief Bernd Osterloh then went on a roadshow to tell investors the carmaker has no need for deeper cost cuts in Germany.

In June, VW said Bernhard Maier, chairman of Volkswagen's value brand Skoda brand, and Stefan Sommer, the company's head of procurement, plus Andreas Renschler, who headed up the Trucks division, would leave Volkswagen.