MUNICH -- Volkswagen Group CEO Herbert Diess was stripped of his leadership of the automaker's core VW brand after internal disputes, reports said.
VW Group's supervisory board on Monday named Ralf Brandstaetter as VW brand CEO, promoting him from his current role as the brand's chief operating officer.
The shuffle came after Diess clashed with key stakeholders over the direction and leadership of the automaker, according to people familiar with the matter. Diess accused supervisory board members of committing crimes by leaking confidential discussions, people familiar with the matter told Bloomberg.
During a recent internal webcast, Diess told more than 3,000 managers that the issue could cause problems with U.S. authorities, which are monitoring the company as part of the settlement from the 2015 diesel-cheating scandal, said the people who asked not to be identified discussing internal events.
VW’s three-year oversight by a U.S. monitor is supposed to conclude in September. An extension or failure to win certification of its compliance mechanisms by monitor Larry D. Thompson would represent a major blow for the company's efforts to restore its image.
Board members were angered by Diess's comments. They were already unhappy with production issues plaguing key models and discussed removing Diess as group CEO, the people said.
At an extraordinary board meeting on Monday, they instead stripped Diess of his direct control over the VW brand, a high-profile position at the center of the auto giant's operations.
Diess, 61, kept his role as group CEO. VW said Diess will focus on overall strategy for the group, which includes brands such as Audi, Bentley, Skoda, Lamborghini and Porsche.
"Ralf Brandstaetter is one of the company’s most experienced managers,” Diess said in a statement. "I am therefore very pleased that Ralf Brandstaetter will be forging ahead with the development of the brand as CEO."
VW on Tuesday sought to defuse the internal dustup. Diess did not intend to suggest that members of the supervisory board were guilty of an offense and offered an apology over the weekend for having made "inappropriate and wrong" statements at an internal event, VW said.
"The members of the supervisory board accepted the apology of Dr. Diess and will continue to support him in his work," the 20-member body said in a statement.
