For years I have wondered why the global auto industry continues to be run by the same kind of engineers who have been at the helm of car companies since the beginning of the automotive era more than 125 years ago.
Isn’t it time for a real digital native, a hardcore IT guy to take responsibility at the highest level?
The latest shake-up, this time at the Volkswagen Group, involves one mechanical engineer, Herbert Diess, being replaced as Group CEO by another mechanical engineer, Porsche boss Oliver Blume.
Don’t get me wrong. There is good reason to put great stock in traditional engineering skills.
Cars may in the coming decades all be electrically powered and driving will be increasingly automated. But metal contraptions on wheels will still propel humans at high speeds along roads they share with other cars.
All those vehicles will need to be well-built so that they are safe, comfortable and sustainable at any speed in any environment. That requires strong traditional engineering prowess.
So, why am I skeptical about the skills mix at the top of the automotive hierarchy?
The firing of Herbert Diess is illustrative.
Diess stumbled first and foremost over his abrasive management style, but shareholders — among them the powerful Porsche and Piech families — were most concerned about the VW Group’s failure to speedily build the software capabilities needed to underpin the current and next generations of cars.
VW has tried. In 2019, it formed a software company, Cariad, to supply the digital systems and the software architectures to power all of its brands. A startup, Cariad already employed 5,000 software engineers.
Cariad is run by veteran industry executive Dirk Hilgenberg. He has a degree in applied physics and brings tons of manufacturing IT experience, mostly gained at premium automaker BMW.
But Hilgenberg’s assignment is to tackle one of the most complex IT challenges the VW Group has ever faced: building two comprehensive software architectures, one for “old” internal combustion engine vehicles, and one for “new” electric cars. And doing that for all of its 10 brands. And doing it fast.
Cariad is late with its deliveries, which has already caused delays for some key new-model rollouts.