Volkswagen Abandons DEI Amid U.S. Tariff Negotiations

U.S. Subsidiaries Excluded from Index Calculation
Volkswagen Becomes Third German Company to Respond to U.S. Demands

German automaker Volkswagen has decided not to apply DEI (Diversity, Equity, and Inclusion) policies at its U.S. operations in response to demands from the Donald Trump administration.

According to local business media on May 19 (local time), Manfred Doess, Volkswagen Group's Chief Legal Officer, stated at the shareholders' meeting on May 16 that "subsidiaries and affiliates in the United States will be excluded from the group's DEI index calculation." Volkswagen calculates a DEI index each year based on factors such as the proportion of women in management positions, and this index is reflected in executive bonuses. Last year, the proportion of women in management was 19.9%, exceeding the target of 19%. This year, the group set the overall target at 20.2%.

President Trump, upon taking office in January, signed an executive order to terminate the DEI policies of the Joe Biden administration. The U.S. government sent emails to embassies around the world, pressuring foreign companies that do business with the U.S. government to comply with the executive order. Volkswagen stated, "We have not received any requests from the U.S. government for information regarding the DEI policies of our subsidiaries."

Since last month, Volkswagen has been in direct negotiations with the U.S. government regarding tariffs imposed on automobiles and local investments. Oliver Blume, Volkswagen's Chief Executive Officer (CEO), told the daily Frankfurter Allgemeine Zeitung (FAZ) last month that the company intends to produce Audi vehicles at its U.S. plant, adding, "We are having constructive discussions with the U.S. government."

Volkswagen is the third German company known to have abolished DEI policies in response to demands from the U.S. government. Previously, Deutsche Telekom's overseas subsidiary T-Mobile and business software company SAP announced that they would not implement DEI policies such as gender quotas. T-Mobile is one of the three largest telecommunications companies in the United States. SAP generates about one-third of its revenue in the U.S.