BERLIN, May 3 (Xinhua) -- German carmaker Volkswagen wants to place a greater focus on "decency" in its corporate culture as a lesson drawn from the "dieselgate" scandal, the newly-appointed chief executive officer (CEO) Herbert Diess told investors on Thursday.
Speaking at Volkswagen's Annual General Meeting (AGM), Diess argued that long-term commercial success could only be secured with a healthy corporate culture. As a consequence, the Wolfsburg-based firm needed to become "more honest" and "more transparent."
Diess was recently named as the successor to ex-CEO Mathias Mueller as part of a far-reaching overhaul of Volkswagen's senior leadership and management structure. The new CEO promised shareholders that he would speed up the implementation of necessary changes, including the launch of a "Together4Integrity" program enabling staff to internally report morally dubious behavior without endangering their careers.
Last week, Volkswagen's U.S. corporate auditor Larry Thompson stated that the automotive industry giant lacked an adequate internal compliance regime to prevent issues like the installation of illicit software to falsify the nitrogen oxide (Nox) emissions of diesel vehicles. Thompson was nominated by U.S. judicial authorities to supervise business practices at Volkswagen.
Diess admitted on Thursday that Volkswagen would have to change the way the company reacted to disagreement and uncomfortable truths to ensure that newly-devised Corporate Social Responsibility (CSR) structures were successfully operationalized. The CEO said that while unprincipled behavior could be observed in any large organization, the "excessive incidence" thereof at Volkswagen in recent years meant that the firm would now have to show "more humility" going forward.
"It is a priority for me that Volkswagen becomes open and transparent", Diess said. In the future, there would be a zero-tolerance policy with regards to inappropriate behavior which also included practices which were not strictly illegal but illegitimate. The CEO further stressed that he agreed with corporate auditor Thompson that values, revenue and profit at Volkswagen should be treated with equal importance by executive managers.
In spite of the reputational damage suffered due to its involvement in the "dieselgate" scandal, Volkswagen achieved a record annual net income of 11.6 billion euros in 2017. Diess told shareholders of the Dax-listed carmaker that they would consequently also receive higher dividend payments.
The CEO expressed confidence that Volkswagen was well-poised to weather structural change in the automotive industry and capitalize on market opportunities created by e-mobility and digitalization. 70 new models would be released in the course of 2018 alone.
Diess highlighted that the organizational bundling of Volkswagen's 12 brands into a smaller number of core brands, including a "Volume", "Premium", and "Super Premium" groups, would make the company more agile and efficient in its management. The CEO argued that decision-making had been delayed by unnecessary parallel structures in the past.
At the same time, Volkswagen is openly considering the idea of divesting from units which do not fit easily into its core business, such as the motorcycle manufacturer Ducati and the gear systems producer Renk. Diess announced that Volkswagen's truck and bus unit would be placed on an independent commercial footing and prepared for an initial public offering "in the foreseeable future."(1 euro = 1.20 U.S. dollars)