The boss of VW promises a greater integrity of the group

BERLIN (Reuters) – The new boss of Volkswagen (DE:VOWG_p) promised Thursday to make the German automaker a group “more honest” in the wake of the scandal of the “dieselgate”, but investors, cautious, advocated for external controls in order to restore his reputation.

The first car manufacturer in Europe will expand its system of internal whistleblower and will strengthen the rules to prevent a recurrence of the misconduct to the scandal of the handling of the polluting emissions of diesel engines in 2015, said the chairman of the management board, Herbert Diess.

“Volkswagen needs to become more honest, more open, more truthful”, he said during the annual general meeting of the group. Prevent bad practices in the future “is the first priority for my colleagues on the executive board and to me personally.”

Matthias Müller, his predecessor, ousted last month, had declared that it was more difficult than expected to bring the managers of intermediate level to adapt to the political post-dieselgate of the manufacturer.

“We have for too long underestimated the value of an open corporate culture that repress dissent, but, on the contrary, the reward,” said Herbert Diess.

Investors have welcomed the changes announced, while expressing the view that these measures alone would not be sufficient to reform in a credible way the corporate culture at VW.

Beyond a new code of conduct for employees and stricter rules for the engineers working on the vehicles, “there is little tangible progress (in VW), clearly showing investors that the changes in the company culture are progressing,” said Michael Viehs, the investment consulting firm Hermes EOS.

“We recommend, therefore, urges the board of supervisors to conduct an independent evaluation of the corporate culture.”

“While the management board provides the operational level of the business for the future, the corporate governance, it, remains in the stone age. We continue to believe that a true new beginning requires also a chairman of the supervisory board truly independent,” said Winfried Mathes of Deka Investment.

Herbert Diess said that VW had already chosen partners to provide batteries and related technologies to a value of about 40 billion euros for its programme of electric cars.

The battery technology will be aimed at Europe and China, where VW flows 80% of its vehicles, while in North America the group has not yet chosen its supplier, according to a source close to VW.

The boss of VW has also renewed Thursday his call for the sector to intensify talks on the common projects of production of batteries in Europe.

The group is still debating a split of the manufacturer of Ducati motorcycles and the manufacturer of transmissions Renk, in the framework of a plan to streamline its operations and improve efficiency, he added.

“For businesses that are not strategic such as Ducati, Renk, and MAN Diesel & Turbo, we will be developing plans for the future sustainable,” said Herbert Diess.

The reflections could lead to an expansion of these companies and the development of growth strategies, but the splits “are also imaginable,” he said.

(Claude Chendjou for the French service, edited by Véronique Tison)