Volkswagen: No more red carpet treatment for Elon Musk

The days when Volkswagen rolled out the red carpet for Elon Musk appear to be over for good.

Under Herbert Diess, the carmaker’s former CEO cultivated a friendly rivalry with the charismatic Tesla entrepreneur that saw the two come to each other’s mutual defense when they landed in hot water. 

A legacy car exec turned passionate EV advocate, Diess once invited Musk to test drive on an airport runway the ID.3, the first VW electric vehicle built from the ground up, capturing the moment for posterity in a company newspaper.

Later the Austrian convinced the Tesla CEO to even give a surprise address before his top management team. 

That’s done now. Over. Finito.

Successor Oliver Blume needs to win over the hearts and minds of an insecure yet highly organized workforce and has no plans to cozy up to his leading competitor, a known union-buster, talks with company managers revealed this week. 

“It may have helped at the beginning,” one VW insider told Fortune, speaking on background. “But after a while, the constant lectures praising Musk while talking down your own achievements begin to demotivate a team.” 

Predecessor Diess angered labor unions with his constant adulation of Tesla

During the middle of the 2021 chip crisis, for example, gaskets blew at the local offices of the IG Metall labor union in Wolfsburg, home to VW’s historic factory.

In a newsletter to their members it demanded Diess stop obsessing over Musk, do his job and buy more semiconductors so the plant could produce cars again.

“The manner in which you systematically badmouth everything without exception is insufferable for us proud employees,” wrote the union, which counts nearly every VW assembly line worker as a dues-paying member. “Your praise for the competition is practically damaging to the business.”

A demanding CEO in the mold of Musk, Diess was notorious for managing through conflict, provoking managers and unions regularly to the point where he was always one step away from getting the sack.

The Austrian also earned a reputation internally for saving in the wrong areas: expensive materials in a car’s interior were swapped out for hard plastic surfaces that felt cheap to the touch.

Yet the former BMW executive was highly respected even within the workforce for steering the company firmly on the path to zero-emission cars after VW’s decade-long diesel emissions scandal was uncovered shortly after he joined.

The new CEO spent a decade away from Volkswagen’s northern German heart

When Diess’ constant provocations became too much of a distraction internally, the board appointed Blume, who promptly unsettled VW workers. 

From the outset, the 54-year-old opted to split his duties, volunteering to remain in Stuttgart as CEO of luxury brand Porsche rather than move full time to Wolfsburg.

This makes him the only German to run two listed blue chip companies simultaneously worth nearly $200 billion in combined market cap.

Any proximity to Musk would only rankle temperaments in a workforce that identifies closely with the cars they build. 

He’s already a fairly unknown face to the common shopfloor worker on the Golf assembly line in Wolfsburg, a city that literally sprang up around a VW plant.

The last full-time stint in headquarters ended a decade ago when Blume headed south to join the c-suite at the prestigious sports car manufacturer in 2013, where he has remained ever since. 

So when the time came to familiarize him to Volkswagen employees, internal communications spared no opportunity to emphasize he grew up right next door to Wolfsburg in Brunswick, the region’s historic heart. The message: the new boss bats for the home team.

VW’s new CEO dubbed an ‘anti-visionary’

Outside of VW, he’s practically a blank slate.

Blume is barely known to the broader German public, which makes it easy to question his motives.

Environmental advocates seized on his early support for carbon-neutral synthetic fuels as proof the new CEO wasn’t fully committed to Diess’ break from VW’s combustion engine path.

Blume then began delaying a number of key EV models Diess had put into development for further polishing.

Weekly newspaper Frankfurter Allgemeine Sonntagszeitung argued in late January, Blume was yanking the company back to the solid ground of its harsh reality, summing the new VW boss up in one pithy headline: “The anti-visionary”.

Asked by Fortune whether he agreed with its less than flattering take, the German said on Tuesday he saw little need to put himself in the spotlight. Nor did he seek any comparisons with people that profess to know the future a century from now—people like Diess and Musk, in other words.

“The only thing that counts is whether our customers are satisfied with our products, so in that sense I view myself clearly as a team player,” he said during the group’s annual news conference. “You might even call me a service provider.”

Instead Blume emphasized the importance of marshalling the troops behind his new 10-point plan to restore the luster to cars like the poorly received ID.3 hatchback.

Once likened in the same breath as the iconic Beetle or the Golf, the EV is already going through a refresh to replace Diess’ cheap interior with more upscale materials after little more than two years on the market. 

To accomplish his task, he will need the support of VW’s influential labor leaders that comprise half the board of directors, where they act as the voice of its 117,000-strong domestic workforce.

And they see red when it comes to Musk.

During Wednesday’s unveiling of Volkswagen’s $25,000 concept EV that could one day compete with Tesla, the head of the eponymous brand was asked whether he thought Blume might invite Musk back to headquarters for a test drive.

Chuckling at the thought, Thomas Schäfer smiled before issuing a curt reply. “Not at all.”

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