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Volkswagen investors are raising the pressure on Oliver Blume to give up his dual role as chief executive at Porsche and its parent company, as Europe’s largest carmaker faces its biggest crisis in decades.
“How can he do both jobs in the right way when the automotive industry is in a structural crisis?” asked Ingo Speich, head of corporate governance at Deka Investment, which is among the 15 largest holders of VW’s preference shares.
Hendrik Schmidt, corporate governance expert at DWS that holds about 2 per cent of VW preference shares, said the crisis showed the unusual leadership structure was “only acceptable for a temporary period”.
Since Blume took over VW Group two years ago on top of his CEO’s job at Stuttgart-based Porsche, he has faced criticism from investors and analysts who have questioned his ability to run two listed companies simultaneously.
The pressure comes as Blume faces a battle with VW’s works council over plans to cut tens of thousands of jobs and close factories in Germany for the first time in the carmaker’s 87-year history. Blume and other executives argue that cuts are vital if the company is to survive structural challenges such as Europe’s shrinking car market and the slowing appetite for German brands among Chinese consumers.
Porsche, which listed in 2022, is part of the VW group, which in turn is controlled by the Porsche-Piëch family.
“There will be more and more pressure on Blume to focus on the job at Volkswagen group, and that pressure will come from the workers, the shareholders and ultimately the Porsche family as well,” said Frank Schwope, a lecturer for automotive management at the University of Applied Sciences FHM Hannover.
Blume — who in 2023 received €9.7mn in pay, including pensions, from both carmakers — has benefited from his close relationship with the Porsche-Piëch family, which wields a majority of VW voting rights.
Problems at VW also come when Porsche is being hit by weak demand in China for luxury EVs, with the company issuing a profit warning because of sales in China plunging by a third from the year before. The sportscar group’s share price has since dropped about 15 per cent.
Porsche SE, the investment vehicle controlled by the Porsche-Piëch family, said it fully supported Blume and his dual role.
VW pointed to Blume’s past comments where he defended his role as head of VW and Porsche by saying that his work at the sports car brand helped him make better strategic decisions for the entire group.
Many investors, who are calling for Blume to concentrate on one role, believe the Volkswagen lifer is the right person to guide the carmaker through the restructuring, especially as his fight with the works council chair Daniella Cavallo heats up.
“If there is anyone who could convince the works council that this has to be done, it’s Blume,” said one person, who closely followed his predecessor Herbert Diess’ failure to win it over. The works council holds half the seats on VW’s supervisory board.
Diess, who was ousted in 2022 following clashes with Cavallo after he suggested the carmaker employed too many people, was always regarded as an unconventional choice for Wolfsburg, having spent most of his career at BMW before joining VW in 2015.
Blume, who began his career as a trainee at Audi in 1994, grew up in Braunschweig — one of the largest cities of Lower Saxony, the northern state and home of VW that also holds a stake in the automaker.
Jefferies analyst Philippe Houchois said the outcome of the restructuring would decide the fates of both Blume and Cavallo.
“If the management cannot get the plant closures, whether Blume can stay or not will definitely become an issue. In the same way for the unions, their head has basically said there would be no plant closure so, if there is one, it puts her in a very difficult position as well,” Houchois said.
Schmidt from DWS pointed out that, in the mean time, Blume’s dual role made the two companies the “only listed companies in Germany that treat themselves to a part-time CEO”.