VW chief calls for settlement to end Ukraine war to help EU economy

The boss of Volkswagen has called for the EU to pursue a negotiated settlement to the war in Ukraine for the sake of the continent’s economy, in an intervention that challenges the stance taken by European leaders.

“I think we should do the utmost to really stop this war and get back to negotiations and get back to trying to open up the world again,” Herbert Diess told the Financial Times’ Future of the Car summit on Monday.

“I think we should not give up on open markets and free trade and I think we should not give up on negotiating and trying to settle.”

The VW chief executive’s comments come a day after Germany’s chancellor, Olaf Scholz, vowed to continue to supply Ukraine with weapons, adding that “capitulating to brute force” was not an option for Europe.

While his stance has been publicly supported by German industry, disruptions to supply chains — exacerbated by the war in Ukraine — continue to hurt the likes of Volkswagen, the world’s second-biggest carmaker.

A shortage of wiring harnesses made in the country forced the company to cut back on production in recent weeks, and VW has sold out of electric models in US and Europe for the year.

Diess said if global trade continued to struggle, “Europe will suffer most, and Germany, but I think it will be bad for the whole world”.

His remarks come as Germany debates whether it could endure a sudden end to Russian gas supplies. A new study by an advisor to the government found that Germany’s economy could lose about 12 per cent of its annual output if supplies stopped abruptly.

Volkswagen’s Diess, who had previously warned that a drawn-out war would do more damage to Germany and Europe than the Covid-19 pandemic, has sparked criticism for previous comments.

In 2019, he apologised 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 into 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 biggest maker of electric cars by the company’s target of 2025.

“I didn’t expect our main US competitor’s growth to be so fast,” he said.

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