Can anybody in Lithuania execute? Anybody, including Emperor Vytautas Landsbergis? Nope.

"Key shareholders in Volkswagen AG joined forces with labor leaders to oust Chief Executive Officer Herbert Diess, who was in the midst of a push to turn the German auto company into a top maker of electric vehicles.

Mr. Diess will be succeeded by Oliver Blume, CEO of VW's sports-car maker Porsche AG and long an ally of the Porsche-Piech family that controls a majority of VW voting rights. Mr. Blume will retain his job running Porsche, which is slated for an initial public offering this autumn.

The departing chief executive had repeatedly clashed with unions, which hold half the seats on the German equivalent of the company's board of directors. Until now he had retained the support of the family, heirs to the VW Beetle inventor, Ferdinand Porsche.

Mr. Diess was informed around midday Thursday that the company's core shareholders and labor representatives had decided to fire him. The broader supervisory board learned of the decision at a meeting at around 4:30 p.m. Friday local time, according to a person familiar with the proceeding.

The sudden ouster comes after renewed internal strife over the slow progress developing core software for the company's new generation of electric vehicles. The delays have caused the launches of some models to be pushed back, raising doubts among the Porsche-Piech family about Mr. Diess's ability to deliver on his promises, people familiar with the situation said.

VW's leadership crisis has plunged the company's electric-vehicle strategy into uncertainty and has raised questions about the company's governance, which is dominated by a triumvirate of family shareholders, the German state of Lower Saxony and the country's biggest trade union.

"The hope of the supervisory board must be for new group CEO Blume to have more success in guiding the software strategy of the group," Daniel Roeska, analyst at Bernstein Research, said in a note to clients. "However, it will take months to come up with a new plan, and creating unrest as the group is heading into a challenging 2023 is the wrong time, in our view."

Mr. Diess couldn't be reached for comment. Mr. Diess has said that before joining VW, he had turned down a job offer from Elon Musk, which has fueled speculation that he could join Tesla Inc. if he left VW.

Auto industry CEOs are wrestling with how best to transition to new technologies -- much of which aren't core to their companies' expertise and requires different thinking, cost structures and skill sets.

Car executives are under pressure to get ahead of new rivals, many of them in Silicon Valley, which have deeper pockets and are unencumbered by a capital-intensive legacy business focused on making gasoline-powered vehicles.

In Detroit, the leadership at General Motors Co. and Ford Motor Co. have outlined bold moves in recent years to transform their operations, including the creation of new supply chains for batteries and the hiring of new kinds of talent. Ford this year took the unusual step of splitting its gas-engine and EV operations into two separate divisions, a move that executives have said will help it be more agile in its shift to new technologies.

Meanwhile, investors are aggressively betting on the EV space, trying to figure out who will be the next Tesla.

Mr. Diess has defined the industry's challenge as shifting from banging metal into cars into developing the skills, resources and vision to create software-defined cars, vehicles that in many ways have more in common with an iPhone than a conventional car.

His attempt to catch up with Tesla was hampered by difficulties turning VW into a developer of software, which is the heart of modern electric vehicles and future self-driving cars.

In recent weeks, people familiar with the company said it had rebooted its plan to develop a unified operating system for its cars after trouble delivering the code led VW's Audi and Porsche brands to postpone the launch of new premium electric models.

It couldn't be determined whether Mr. Blume would continue to pursue Mr. Diess's strategy of keeping core software development in-house or whether he would turn to Alphabet Inc.'s Google or Apple Inc. as some rivals have.

In March, Mr. Blume said he and his management team met senior Apple executives for a meeting at which they discussed a range of potential projects. Mr. Blume disclosed no further details.

Ferdinand Dudenhoffer, director of Center for Automotive Research in Duisburg, Germany, said it was to be expected that Mr. Blume would present a new software strategy for the company.

"This big issue of the software-defined car is a huge challenge for conventional auto makers," Mr. Dudenhoffer said. "Either auto makers will become tech companies like Google, Apple and Microsoft, or they will become dependent on the tech giants."

Mr. Diess survived several challenges to his position. In December, following a clash with labor representatives, directors stripped him of some of his responsibilities and reshuffled his management team. But this week's move to push him out came suddenly and wasn't linked to any single incident, people familiar with the decision said.

The families and union leaders agreed to remove Mr. Diess in the belief that Mr. Blume, 54 years old, who became CEO of Porsche in 2015, would lead with more consensus among management and VW stakeholders, people familiar with the decision said. Mr. Blume, an engineer by training, has long been a favorite of the Porsche-Piech families and union leaders as a successor to Mr. Diess. But Mr. Blume has repeatedly said he was happy at Porsche.

While union leaders have acknowledged Mr. Diess's strategic vision and his achievement in transforming VW's culture for the EV age, they have questioned his ability to execute, as highlighted by the software problems. [1]

All firms and government shops have to make and didn't make the same transition that Mr. Diess didn't make. We definitelly will lose in competition like Finnish Nokia lost to American Apple. Will anybody in Lithuania  be losing their job in September? Impossible. We just will change the position of the orchestra in this going down to the fishes ship of Lithuania. Too bad for the nation. 

1.  VW CEO Diess to Step Down After Clash With Labor Unions
Boston, William; Kantchev, Georgi. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 23 July 2022: A.1.