The Volkswagen boss called on the EU to pursue a negotiated settlement of the war in Ukraine for the sake of the continent’s economy, an intervention that challenges the position taken by European leaders.
“I think we should do everything we can to really stop this war and get back to negotiations and start trying to open up the world again,” Herbert Diess said at the Financial Times Future of the Car summit on Monday.
“I think we shouldn’t give up on open markets and free trade and I think we shouldn’t give up on negotiating and trying to settle.”
The comments drew a sharp rebuke from Dmytro Kuleba, Ukraine’s foreign minister. “The best strategy for big German business would be to completely sever business ties with Russia and then call on Russia to stop the war and return to diplomacy,” he told the FT. VW suspended local production and exports to Russia in March.
Andrij Melnyk, Ukraine’s Ambassador to Berlin, said: “People in Kyiv would prefer the CEO of VW to speak personally to President Putin, a man he knows well and the man who started this war of destruction against the Ukrainian people”.
He added that Diess should “call on the Kremlin to immediately cease combat operations against the Ukrainian civilian population.”
Diess spoke as Vladimir Putin reaffirmed Russian war aims during the annual Victory Day parade in Moscow’s Red Square. In his speech, the Russian president claimed that Kremlin troops were “fighting on their own land” in the dispute, hinting that he would claim more Ukrainian territory, including land currently occupied by his forces.
Highlighting the difficulty ahead of us in reaching a negotiated peace, Ukrainian President Volodymyr Zelensky accused Russian leaders of repeating the “horrible crimes of the Hitler regime” by waging a war of atrocities and land grabbing. “This is not a war of two armies,” he said in a video address. “It’s a war of two worldviews, a war waged by barbarians.”
Diess’ comments on the need for a settlement come a day after German Chancellor Olaf Scholz vowed to continue supplying arms to Ukraine, adding that “surrender to brute force” was not an option for Europe.
While Scholz’s position has been publicly backed by German industry, supply chain disruptions – exacerbated by the war in Ukraine – continue to hurt Volkswagen, the world’s second-largest automaker.
A shortage of domestically made wiring harnesses has forced the company to cut production in recent weeks, and VW has sold electric models in the United States and Europe for the year.
Diess said if global trade continues to struggle, “Europe will suffer the most, and Germany, but I think it will be bad for the whole world.”
Germany wonders if it could withstand a sudden end to Russian gas supplies. A new study by a government adviser has found that the German economy stands to lose around 12% of its annual output if supplies suddenly stop.
Diess, who previously warned that an interminable war would do more damage to Germany and Europe than the Covid-19 pandemic, drew criticism for previous comments.
In 2019, he apologized after using the phrase “Ebit macht frei”, or “Profits will set you free” – an apparent play on the phrase “Arbeit macht frei”, or “Work will set you free”, which was forged in the gates of the Auschwitz concentration camp. Later that year, he said he was “unaware” of China’s mass detention of Muslims in Xinjiang province.
On Monday, Diess also warned that the German group would struggle to overtake Tesla as the world’s top electric car maker by 2025.
“I didn’t expect our main US competitor to grow so fast,” he said.