Friday 16 October 2015

VW bolsters integrity, legal, ahead of 'defeat' issues

Chairman of the supervisory board of Volkswagen AG, Hans Dieter Pötsch, has requested the chairman of the supervisory board of Daimler AG, Dr. Manfred Bischoff, to release Dr. Christine Hohmann-Dennhardt, Daimler’s legal specialist.

Pötsch has requested Daimler’s supervisory board agree the early termination of Dr. Hohmann-Dennhardt’s contract as member of the board of management of Daimler AG for integrity and legal affairs. Her contract was due to expire on 28 February, 2017.

However, she is to join the Volkswagen Group as of 1 January, 2016 as board member for integrity and legal affairs.

It is claimed that “Compliance is now firmly anchored at Daimler and in its corporate culture”, and in coordination with the executive committee of the supervisory board, the chairman of the supervisory board of Daimler AG has agreed to this request in the interest of good governance in the German automotive industry. It is possible also that VW may have a few court cases on its hands in the months ahead and for which specialist expertise may be required.

“We are delighted that Dr. Hohmann-Dennhardt has agreed to take on this responsible task and that we can build on her outstanding competence and experience”, said Pötsch. “At the same time we would like to thank Daimler AG for agreeing to our request to the early termination of Dr. Hohmann-Dennhardt’s contract.”

                                             Future of the diesel

COMMENT. No reason is given as to why Volkswagen Group would need the services of Dr. Hohmann-Dennhardt at this time to ‘anchor VW’s compliance’, but it has to be assumed that she is required to reshape VW’s integrity and legal strategy ahead of upcoming issues relating to its ‘defeat device’ scandal, both from an internal perspective and from an external one.

That Daimler, possibly the next largest German car and truck builder, has elected to release Dr. Hohmann-Dennhardt suggests the German automotive industry believes this is an appropriate time to close ranks and stand together on a matter that has both national and corporate implications.

At stake, after all, is the standing of the German automotive industry to produce high-quality, legally-compliant passenger cars, vans and heavy commercial vehicles.

With one bad apple in the barrel, there is always a risk of the implications spreading and affecting everyone.

For VW, recapturing its former status, so carefully and meticulously crafted over the years since the first ‘Beetle’ appeared after the Second World War, is likely to prove expensive, not only in terms of Euros, but in goodwill, and customer appeal and satisfaction.

That such a highly polished image has been squandered for some reason, not as yet explained, at least to the media, if not to customers worldwide, is something that will have ramifications for employees and well as potential customers.

It is hardly surprising therefore that the supervisory board has moved quickly to bolster the company’s integrity and legal departments.

Quite apart from the implications for personnel both inside and outside the company, there is the whole matter of the integrity of the diesel engine.

VW has a great deal of capital tied up in plant and equipment to manufacture diesel engines, both in Germany and outside. In addition, major suppliers such as Bosch are likewise affected, not to mention the other diesel-related suppliers, large and small.

If there is even the slightest hint that passenger car and light commercial diesel engines are not able to meet forthcoming emissions and greenhouse gas (GHG) requirements and deliver expectant levels of fuel economy, then this could have major implications for the Company and Germany.

No doubt, over the coming months until hardware and software changes are implemented, VW (through its public relations departments) will be working overtime no doubt to do all it can to not only reassure the public of the integrity of the corporate business but of the diesel engine itself.

In this respect, Dr. Hohmann-Dennhardt will require all her skills as well as those of her colleagues both inside and outside VW.

In the meantime, she will no doubt be bringing herself ‘up to speed’ with the inner workings of VW which are likely to be quite different to those of Daimler.

1 comment:

Alan Bunting said...

Most people will struggle to get their heads round the fact that a manufacturer, be it in the auto industry or elsewhere, should employ a 'director of integrity'. We now know that Daimler already had such a board member, in the person of Christine Hohhmann-Dennhardt, though we are not made privy to her job description in Stuttgart. Neither is it vouchsafed whether VW has hitherto had anyone on board with such a job title.
Announcement of the Wolfsburg appointment is tantamount to further confirmation that VW's business integrity has fallen short of expectations in relation to the diesel emissions affair. The company's top brass have already eaten a large helping of humble pie in recent weeks.
In terms of Volkswagen's image and reputation, the trumpeting of Hohhmann-Dennhardt's appointment could be seen in some quarters as first and foremost a public relations exercise.