Audi’s CEO Reportedly Has Lots Of Haters

If you’re the CEO of a company that needs to turn things around, any real progress is going to require some strong supporters within the firm. And while Audi CEO Gernot Döllner might have that on some level, a recent report suggests plenty of internal critics due to a purportedly autocratic and occasionally hubristic leadership style.

Also in today’s Morning Dump, Ford has mandated almost all its employees return to office four days a week, and just about everyone’s unhappy with NHTSA ahead of a hearing. That’s a lot of bad news, so I’m rounding things off with something a little less tense. Mercedes-AMG’s four-cylinder engine is on its way out for a rather amusing reason.

Welcome back to The Morning Dump. Matt’s out today, but I’m here to assemble all the top little pieces of car industry news you’ll want to read. This one’s a little bit heavy, so grab a latte or perhaps a big cup of tea, and let’s get into it.

Infighting At Audi

Someone has it out for Gernot Döllner, the current CEO of Audi, man in the black suit in the above photo. It’s not necessarily because he has no prior board experience or prior experience at Audi prior to being shuffled over from Porsche to fill the role, but those things likely don’t help. See, German industry publication Manager Magazine just ran a piece titled “The brutal regime of Audi boss Gernot Döllner,” whose subheadline reads (all translated from German via Google Translate):

The smartest, the most consistent: Gernot Döllner presents himself as Audi’s only true savior. But the restructuring hasn’t worked so far – new billion-dollar holes are opening up. A story about Germany’s toughest car boss.

The article’s art and context sets the tone bluntly—this is a German publication running a story on Döllner with the lead graphic featuring a red hat that says “Make Audi Great Again.”  What’s all that about, then? From Manager Magazine:

Works council chairman Jörg Schlagbauer (47) once described Döllner as a “guy who gets things done”; “he has a plan.” In private circles, however, he is also said to be critical: Döllner “occasionally missteps in his actions, behavior, and words,” a colleague quoted him as saying. He has to learn that. Döllner initially didn’t realize, another supervisory board member added, “that as CEO, you’re only the first among equals.” A former colleague, at a very high level, put it most drastically: “Döllner doesn’t grab his people by the heart. He grabs them by the throat.”

An allegedly headstrong attitude also means a company can be hampered by hubris, which, the story implies, seems to be happening with both a return-to-office mandate and a new software debacle. As Manager Magazine reports, Döllner took the lead on integrating Rivian’s software into Volkswagen Group vehicles, which should work great for EVs but is reportedly experiencing troubles with combustion powered vehicles. For now, it seems that Audi is exploring a project from Applied Technology called “Nova” that will cost somewhere between €2 billion and €3 billion for future ICE software integration, and this project is threatening to delay Rivian software implementation. From the publication:

They view the looming billion-dollar burden with renewed concern – but also with a certain amount of glee. The fact that Döllner is now failing at something as important as the software project is a source of satisfaction for some. “I’ve never met an automotive manager who can do everything,” a high-ranking sales representative quips. “Döllner, on the other hand, thinks he knows everything best, from development to sales.”

Ouch. Granted, the harsh tone of the piece may be driven by some alleged conduct; back in 2023, Audi Works Council Chairman Jörg Schlagbauer pushed back on Döllner’s return-to-office plan, an understandable move. However, rather than hear Schlagbauer out, Döllner allegedly made what some consider a cruel play at department managers and pushed ahead with return-to-office, demanding quotas to see who was able to get their team to the office most often and who stayed at home. Per the story, the five “worst” performers were made to run for the board, which seems like… an odd punishment, though certainly one that would shine unwanted light on those five individuals.

So what other side effects does this allegedly thorny sort of leadership style have? Well, one of the biggest internal moments involves tales of a meeting around sales planning. The meeting itself, which Manager says involved six people including head of sales Marco Schubert and Chief Financial Officer Jürgen Rittensberger, is officially said to have ended relatively peacefully, but that’s not the way everyone within Audi talks about that meeting.

Various other versions of this story are circulating. Sometimes objects are said to have flown through the air, sometimes hands played a role; sometimes it’s said that factory security was alerted. Repeatedly, specific dates allegedly haunted the Audi organization and the entire Volkswagen Group on which Gernot Döllner would lose his position as CEO. Döllner’s critics—and he has plenty of them—hoped for their boss’s replacement; they expected a coup.

[…]

The “heated conversation” one of the six speaks of, however, remains. The upheavals it triggered within the company demonstrate one thing above all: Something is wrong at Audi AG. A CEO whose organization believes he is capable of such outbursts has a problem. A company that has to deal with such stories and their consequences in the most economically perilous situation since the 1980s, of course.

While it ultimately seems like nobody ended up throwing hands in the boardroom, the fact that such tales were plausible paint a troubling picture of corporate culture within Audi. While autocratic leadership arguably worked in the Ferdinand Piëch era, those days are clearly decades in the past. We don’t have firsthand account of Döllner’s leadership style (we’ve reached out to Audi for comment), but he definitely seems to be making some enemies.

Emissions Might Kill AMG’s Controversial Four-Cylinder

Over the past year or two, it feels like we’ve seen Mercedes-AMG go through the five stages of grief on customers not wanting a two-liter four-cylinder engine in anything bigger than a GLA 45. First came the denial that vehicles like the four-cylinder C 63 would alienate shoppers, later came the bargaining that the real issue was explaining the technology to consumers, and it seems like we’re finally moving onto acceptance. Autocar reports from Germany that “a senior insider confirmed that future petrol-powered Mercedes-AMG models are set to adopt either an updated version of today’s in-line six-cylinder engine or an all-new V8 featuring a flat-plane crankshaft, similar in design to that used by the GT Black Series.”

While a precise timeframe for the phase-out has not been confirmed, Autocar has been told the engine will remain in production for the time being before “eventually” being replaced.

Among the key reasons for the shift in strategy is the high cost of engineering the four-cylinder to comply with upcoming Euro 7 emissions regulations.

“There’s no doubt about its potential – this is one of the most sophisticated engines we’ve ever built – but the investment to make it EU7-compliant is very high,” said the source.

It’s interesting that the supposedly greener downsized, turbocharged engine may run into the headwinds of new emissions standards, but that gives us a rough timeline for AMG’s shift in focus. If any applications of the four-cylinder engine require significant re-engineering to meet Euro 7 emissions standards, don’t be surprised if they’re replaced before Nov. 29, 2027, the phase-out date for existing vehicles meeting Euro 6e but not Euro 7. It’s likely plug-in hybrid models like the C 63 S E Performance will require less work to remain compliant than non-hybridized applications like the AMG GT 43, so if models have to go, expect the ones you don’t plug in to switch means of propulsion first.

Everybody Hates NHTSA

Speaking of regulation, the National Highway Traffic Safety Administration is in the hot seat right now. In advance of a Thursday hearing on the state of NHTSA, written testimony from Alliance for Automotive Innovation president and CEO John Bozzella criticized NHTSA for allegedly drifting apart from the industry, citing restrictions on matrix headlights, concerns around upcoming automatic emergency braking standards, and the ancient-but-still-used unbelted occupant crash test. At the same time, Bozzella’s written testimony is critical around NHTSA’s feature-first approach to road safety at a time of elevated highway fatalities compared to pre-2020 figures.

New safety features can and should continue to play a role, but we cannot regulate our way to zero fatalities through technology alone. From mandate to deployment, new vehicle safety technologies often take 5 to 7 years to develop, and even then, it can take an additional 30 years for that technology to fully penetrate the fleet, given the pace of vehicle turnover. Behavioral change, on the other hand, has the potential to save lives today. The best outcomes will come when technology, policy, and enforcement work in concert, not in isolation.

Bozzella isn’t the only party to take issue with NHTSA ahead of Thursday’s hearing. In written testimony, Insurance Institute for Highway Safety President David Harkness took aim at the agency for dragging its feet on mandating potentially lifesaving technology now common in other jurisdictions.

One example of an action that we have repeatedly called on NHTSA to take is to require antilock braking systems (ABS) for motorcycles. Multiple IIHS studies have shown that this technology saves lives. Our most recent analysis, published in 2022, found that fatal crash rates for motorcycles with optional ABS are 22 percent lower than for identical models without the technology.

We first petitioned NHTSA to require motorcycle ABS in 2013. Ten years later, we submitted a new petition with updated evidence. To date, we have not received any response to either petition. In the meantime, the 27 member states of the European Union, the United Kingdom, Brazil, Japan, Taiwan, Australia, New Zealand and India have all mandated the life-saving technology.

It’s usually a bad sign when a government entity’s made both the industry its trying to regulate and safety non-profits in that field unhappy, and it’s a downward spiral that’s been going on for ages. From a revolving door of acting administrators to funding that simply hasn’t kept up with inflation, NHTSA hasn’t been in its best shape for decades, and now it feels like it’s letting down a lot of people. However, I wouldn’t necessarily take this hearing as a good thing. The current administration hasn’t been secretive of its desire to defund agencies, and the path from here might not actually be beneficial to NHTSA as an entity.

Ford’s Return To Office

Oh, and while we’re on the subject of discontent, some Ford employees probably aren’t thrilled about the prospect of returning to the office for at least four days a week. Reuters broke the news, and while the return will happen after the best months of summer end, it’s going to affect a lot of people.

“Many of our employees have been in the office three or more days per week for some time now. We believe working together in person on a day-to-day basis will help accelerate Ford’s transformation into a higher growth, higher margin, less cyclical and more dynamic company,” a Ford spokesperson said in a statement in response to a Reuters query.

The spokesperson said the new policy affects the majority of its global salaried workforce, but declined to provide a specific number. Ford notified employees of the updated policy on Wednesday, and it takes effect September 1, the spokesperson said.

Here’s the thing: There’s no concrete, high-sample, peer-reviewed evidence that unequivocally states in-office work is any more productive than hybrid work or remote work. In fact, the Bureau of Labor Statistics found that productivity increased as remote work increased in 61 industries between 2019 and 2021. If a job can be done remotely, why not do it remotely? I guess power really is a drug.

What I’m Listening To While Writing TMD

Sometimes you need a high-energy track to really get you into gear, and “Heaterz” by AJ Tracey & Pozer is exactly the sort of banger needed for a grey Thursday.

The Big Question:

As it stands right now, NHTSA clearly isn’t living up to its potential. How would you fix the agency?

Top graphic credit: Audi