Step down | Due to a string of setbacks, the CEO of Volkswagen will resign.

Herbert Diess, the CEO of Volkswagen, is resigning after the repercussions of the German automaker's emissions-cheating scandal damaged his reputation.

(AP) VIENNA — Herbert Diess, the CEO of Volkswagen, is resigning after the repercussions of the German automaker's emissions-cheating scandal damaged his reputation.

The Wolfsburg, Germany-based business announced unexpectedly Friday that Diess will leave on September 1 "by mutual consent" with the board. He left without giving any explanation. Diess will be replaced by Porsche CEO Oliver Blume.

When Diess became the automaker's CEO in 2018, the industry was undergoing a lot of upheavals, including a move toward increased manufacturing of electric vehicles. Diess also presided over the company throughout this time. His agreement was scheduled to end in 2025.

In a statement, Board Chairman Hans Dieter Poetsch expressed gratitude to Diess and lauded his contribution to "advancing the restructuring of the organization."

In addition to guiding the business through exceedingly choppy waters, Poetsch noted, "he also adopted a completely fresh strategy."

Diess concentrated on Volkswagen's transition to zero-emission vehicles, but observers claim he was unable to bring about change within the organization and that the automaker has lagged in certain crucial advancements, such as the installation of software.

According to analysts at Jefferies Equity Research, "with market difficulties intensifying and an increase in the number of new and fast-follower adversaries, new management allows reassessing strategy or jump-start stalled relationships."

Before his dismissal was made public, Diess wrote on LinkedIn about the challenges the automaker was facing, including the conflict between Russia and Ukraine and a lack of computer chips that were impeding production. Despite these difficulties, he expressed satisfaction with the company's performance, citing strong demand for Volkswagen's electric vehicles and recovery in China following COVID-19 lockdowns.

His article stated that "many of us are looking forward to a well-deserved summer holiday after a particularly difficult first half of 2022."

According to reports, Diess has had disagreements with the company's strong labor representatives over matters such as important personnel choices. The need that worker representatives to sit on the board and the ownership interest held by Lower Saxony, the company's home state, give workers at Volkswagen an extraordinary level of influence.

The emissions controversy lagged behind Diess as well. Diess joined VW from BMW and assumed leadership of the company just before it was exposed in 2015 for using software to circumvent U.S. emissions standards for diesel vehicles.

Volkswagen acknowledged installing software that disabled pollution controls while driving normally and activated them during car testing. That gave the impression that the vehicles complied with strict U.S. limits on nitrogen oxide pollution.

The business paid fines and settlements related to the fraud totaling 31 billion euros ($34 billion).

Diess and Poetsch were accused of stock manipulation by German prosecutors in 2019 for failing to alert investors to the impending controversy promptly. Later, the allegations were dismissed in exchange for a payment of 9 million euros (or dollars), but neither of the two made any admissions of guilt.

Arno Antlitz, the company's chief financial officer, will take on the role of the chief operating officer, Volkswagen also announced on Friday.

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