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, 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 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 major German business would be to fully 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: “In Kyiv people would prefer the VW CEO to address President Putin personally, a man he knows well and the man who has unleashed this war of destruction against the people of Ukraine.”
He added that Diess should “call on the Kremlin to immediately cease combat operations against the civilian population of Ukraine.”
Diess spoke as Vladimir Putin reasserted Russian war aims at the showcase annual Victory Day parade in Moscow’s Red Square. In his address, the Russian president claimed the Kremlin’s troops were “fighting on their own land” in the conflict, hinting that he would lay claim to more Ukrainian territory, including lands currently occupied by his forces.
Emphasizing the difficulty that lies ahead in reaching a negotiated peace, Ukraine’s president Volodymyr Zelensky accused Russia’s leadership of repeating the “horrific crimes of Hitler’s regime” by waging a war of atrocities and land grabs. “This is not a war of two armies,” he said in a video address. “This is a war of two world views, a war waged by barbarians.”
Diess’s comments on the need for a settlement come a day after German Chancellor Olaf Scholz vowed to continue to supply Ukraine with weapons, adding that “capitulating to brute force” was not an option for Europe.
While Scholz’s 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 has forced the company to cut back on production in recent weeks, and VW has sold out of electric models in the 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”.
Germany is debating whether it could endure a sudden end to Russian gas supplies. A new study by an adviser to the government found that Germany’s economy stood to lose about 12 percent of its annual output if supplies stopped abruptly.
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 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 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 largest 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.