There is a certain irony in what has just started to happen at Deutz AG: in the Cologne-based company, which builds heavy diesel engines for excavators and tractors, it was mainly men at the highest level who debated the new, statutory women’s quota for board members. This dispute, recorded for posterity in sometimes angry emails, has now escalated to such an extent that two top men are losing their jobs: the CEO and the chairman of the supervisory board.
Deutz, founded in 1864, thus provided a rare insight into how badly some industrial groups – certainly not all – are struggling with the second management positions law (FüPoG II), which the federal government passed last year. Accordingly, listed and co-determined companies with more than three board members must appoint at least one woman to the board of directors at the earliest opportunity, if they have not already done so. That, some say, is not that easy in this specific case.
It’s Saturday, shortly after 8 p.m., and the relevant entertainment shows begin on television when Deutz announces the showdown: CEO Frank Hiller is leaving “with immediate effect”, the supervisory board has unanimously dismissed the 55-year-old. A reason will be in the Message not known. There is talk of irreconcilable differences. It is clear that the farewell will be expensive: Hiller only signed a new contract last year until the end of 2026.
IG Metall, which has a say with several men and women on the company’s supervisory board, is clearer: the union calls it a power struggle that broke out between Hiller and supervisory board chairman Bernd Bohr. The starting point was the implementation of the FüPoG II. With the dismissal, a new start is now possible, emphasizes the employee side: “The company can concentrate on selling, building and developing engines again and no longer deals with itself.”
What power struggle means today became apparent shortly before Christmas 2021, when Hiller sent a critical letter to the entire supervisory board. In it, Hiller took apart ideas from the panel surrounding Bohr. One could interpret this “rather as circumventing the active promotion of women on the board”, warned Hiller.
The dismissed CEO Hiller sees no legal basis for his dismissal
In the meantime, the supervisory board had considered whether the contracts of the four existing board members – all men – could be extended ahead of time before the women’s quota takes effect. This would have given the group time, according to the benevolent interpretation, to find the right woman for the board. But the idea fell through in a legal review.
Alternatively, Chairman of the Supervisory Board Bohr spoke to a member of the Management Board about whether he would be willing to be demoted to General Manager. Then a trio of board members would remain for which the new quota does not apply. But the board member declined.
The recalled CEO Hiller sticks to the matter: He cannot understand that he was thrown out. “I can’t see any legal basis for this,” says Hiller of the SZ. “I’m curious how you want to explain this decision and the consequences to the shareholders.”
Working on an engine in Cologne: Deutz employs a good 4,000 people, most recently almost 88 percent of the employees were men.
(Photo: Rolf Vennenbernd/picture-alliance/dpa)
What is known, however, is that the former chief supervisor Bohr was annoyed by Hiller’s Christmas mail. Hiller interfered in matters of the supervisory board, torpedoed the “solution of the general representative” and restricted the supervisory board’s room for manoeuvre. “It is more than questionable for me,” Bohr threatened in an email on Christmas Eve, “whether a trusting cooperation between the chairman of the supervisory board and the chairman of the board can still be established after this incident.”
But now Bohr does not come out of the dispute unscathed either. The 65-year-old resigns as chairman of the supervisory board, but should remain a simple member of the board – a rather rare occurrence. The Supervisory Board appreciates “the professional and prudent cooperation” with Bohr, according to the statement. IG Metall also thanks the former Bosch manager for “continuing to be available with his experience”.
Now a woman is to take over the vacant position on the board
The problem: Under Bohr, Deutz had three on the board last year four people expanded – and appointed one man each as the new chief financial officer and chief technology officer. Bohr’s critics chalk this up to him as an original error. Because at that time the Bundestag had already discussed the FüPoG II. Dietmar Voggenreiter, 53, should do better now: The former Audi manager inherits Bohr as chief supervisor.
And from now on, Sebastian Schulte will lead the board instead of Hiller. The previous chief financial officer and labor director was from ThyssenKrupp just last year switched to Deutz. The supervisory board and IG Metall emphasize that the 43-year-old is a real team player. If you like, that can be read as a small tip against Hiller. In any case, Schulte says that it is now a matter of constructive cooperation between the supervisory board and the board of directors.
Assembly of large engines in 1910: Deutz meanwhile also built trucks, buses and tractors itself. But over time, the Cologne-based company focused on engines again.
(Photo: picture alliance/dpa)
If you try to draw a line under this man’s box, you end up back with the original question: Does Deutz want to appoint a woman to the board, or should it stay with three men? Clearly the former, says the supervisory board: “A corresponding process has already been set up.”
Chief supervisor Bohr, who has now resigned, argued in January that it would have been difficult to appoint a woman as chief technology officer, for example. “You will find almost no female candidates in the field of industrial engines,” said Bohr. Unfortunately, in engineering subjects, only 15 to 20 percent of students are still female. And: “Many women end their careers so early that they never come into consideration as board members.” The new quota rule is therefore a good idea, said Bohr, and it will prove its worth. “But at the moment the transition is painful for companies like Deutz.”
And when Deutz appoints a woman to the board, she should be responsible for a core department such as purchasing or production, Bohr specified. The path for this actually seems clear: since Schulte has been promoted to CEO, the responsibilities for finance and human resources, purchasing and IT will be free. These are departments that have long been run by women as a matter of course in several industrial companies.