VA fortnight ago he was still on the stage in Shanghai to talk about software development for the Chinese market in front of visitors to the world’s largest motor show. But now it is clear: Dirk Hilgenberg’s days as head of the Volkswagen subsidiary Cariad are numbered. As can be heard from informed circles, the VW CEO Oliver Blume wants to sell the 58-year-old software manager. It will also be tight for his current management team.
The software dispute in Wolfsburg is picking up speed again after problems in the development of new IT systems for vehicles had plunged the group into a management crisis last year. According to information from the FAZ, it is planned that the Cariad supervisory board will decide on Hilgenberg’s dismissal at its meeting next Thursday, one day after the VW Group’s general meeting.
In addition to Hilgenberg, technical director Lynn Longo and CFO Thomas Sedran are also criticized. Their posts are shaking too. On the other hand, HR manager Rainer Zugeh, who is crucial in the highly competitive market for development engineers and who also has the trust of the influential IG Metall, is apparently not up for discussion. The news portal “Business Insider”, however, speculates on the dismissal of the entire board of the software division.
After taking office in September, VW boss Blume announced that he wanted to examine Cariad’s direction. After a gallows reprieve for Hilgenberg, the realization has now apparently prevailed that a hard cut is necessary. The intervention is equivalent to an earthquake in Wolfsburg. Because Cariad was originally supposed to develop the entire software architecture of the next model generations in the group as a central unit. With the expulsion of top management, the loss of importance is now clearly evident.
At the top of the problem division: Cariad boss Dirk Hilgenberg
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Image: Cariad
The move came about primarily under pressure from the Audi and Porsche brands, which have been criticizing Cariad’s problems for some time. A complete exit from the unit, which had been speculated about in the meantime, is apparently not imminent. “If Cariad were to close, we wouldn’t be able to get any cars on the road for the next year and a half,” says a manager close to the group. Cariad is too closely involved in the development process of the brands. What is clear, however, is that little remains of the original plan for a very strong central unit and that the brands are once again taking control of software development.
From the VW group it is said that they have always emphasized that they want to hold on to Cariad. “For the Volkswagen Group, the expansion of our software expertise is and remains an important component for the attractiveness of our products.” A spokesman refers, among other things, to the 10-point plan with which Blume wants to make the VW Group more efficient. “In the course of this, we have already made decisions and, for example, arranged the software architectures chronologically.” No decisions were made on personnel changes.
Software problems burden the group
Cariad boss Hilgenberg once worked for BMW. He came to the Wolfsburg group under ex-VW boss Herbert Diess and built the division into its current form. At first, hopes were high. But then Cariad got caught up in ever new technical problems and threw entire vehicle launches off track. Among other things, important models are affected, such as the Audi Q6 E-tron and the fully electric Porsche Macan, which are due to be launched this year with a massive delay.
In the management of the Porsche and Audi brands, the anger at Cariad had therefore grown over the past two years. Last fall, the dispute came to such a head that the then CEO Diess lost his job. His successor Blume, who is also the head of Porsche, has now apparently given in to the pressure from Stuttgart and Ingolstadt. It is not yet known who will lead Cariad in the future.
Strategy swing under flower
In Shanghai, the division presented, among other things, a new joint venture for infotainment in vehicles. In other fields, too, she recently made more alliances, a departure from Diess’ strategy. The aim was to build up as much competence as possible on your own, with little help from outside. One does not want to become dependent on global tech giants, according to Diess’ mantra. In an interview with the FAZ in December, his successor Blume had already made it clear that he didn’t think much of it: “I’m open to partnerships. We don’t want to and can’t do everything ourselves.”
In general, Blume wants to lead the group differently than the erratic, unpredictable Diess, more appreciative and more in a team. With the intervention in the software division, however, he is now giving another sign that he does not shy away from tough decisions. This was first evident last year in the Wolfsburg board of directors: the top management team, which was bloated at the time, was downsized. Several managers lost their posts.
The Cariad software division employs more than 6,000 people around the world. According to the latest figures from VW, it has currently signed license agreements with the group’s brands to equip a good 15 million vehicles, a third more than in the previous year. The operating loss in 2022 was 400 million euros, as in the previous year. This is explained by high start-up investments. Most recently, the goal was announced to bring Cariad into the profit zone by 2025 or 2026.
