The head of Volkswagen"s (VOWG_p.DE) powerful works council will take a management position at the carmaker"s truck unit Traton (8TRA.DE), removing a prominent opponent of faster and more drastic restructuring at the German carmaker. Traton said on Friday that Bernd Osterloh, who has been a member of the supervisory board at Volkswagen since 2005, will take up the position of personnel director on May 1. Last year, the 64-year-old Osterloh clashed with Volkswagen Chief Executive Officer Herbert Diess, opposing an attempt to extend Diess" contract as he strives to cut costs and free up resources to invest more in electric vehiclesVolkswagen"s (VOWG_p.DE) supervisory board on Monday said Chief Executive Herbert Diess had its full support as he leads a new executive team to transform the German automaker but stopped short of bringing forward a contract extension. In a power struggle leading up to a board meeting on Monday, Diess had demanded an early contract extension and more backing for his reform efforts from the carmaker"s non-executive board. He met resistance from powerful directors who represent employees and unions. After the meeting, the non-executive supervisory board also said in a statement the carmaker would cut overhead costs by 5% and procurement costs by 7% over the next two years. Diess had sought to lower costs in Germany to free up resources for a mass electrification push and to transform the 83-year old automaker into a tech company modelled on Tesla (TSLA.O). That led to a clash with Bernd Osterloh, Volkswagen"s chief labour representative, over issues including appointments to the management board and whether to extend Diess"s contract beyond 2023. The non-executive board, of which Osterloh is also a member, said it had unanimously voted to support the transformation to e-mobility and digital technologies. "Over the coming years, the executive board will implement this strategy under Herbert Diess" leadership," the supervisory board said. The statement said Arno Antlitz would become group finance chief, succeeding Frank Witter, who would quit in June 2021 as previously announced. Thomas Schmall would become board member in charge of a newly-created technology division from Jan. 1 Also from next year, Murat Aksel, the head of procurement at the VW car brand will in addition take on the same role for the entire group.Volkswagen CEO Herbert Diess" most outspoken opponent is sidelined and it"s fair to say that it creates the opportunity to run VW in a more rational fashion," Bernstein analyst Arndt Ellinghorst wrote in a client note. Reuters first reported on Thursday that Volkswagen was considering aVolkswagen is considering a supervisory board change that could lead to the departure of Bernd Osterloh, who heads its powerful works council and clashed with CEO Herbert Diess last year, sources familiar with the matter said on Thursday. If confirmed, Osterloh"s exit could weaken resistance to faster and more drastic restructuring at the German carmaker. Last year, the 64-year-old opposed an attempt by Diess to extend his contract as the CEO strives to cut costs and free up resources to invest more in electricVolkswagen"s (VOWG_p.DE) supervisory board on Monday said Chief Executive Herbert Diess had its full support as he leads a new executive team to transform the German automaker but stopped short of bringing forward a contract extension. In a power struggle leading up to a board meeting on Monday, Diess had demanded an early contract extension and more backing for his reform efforts from the carmaker"s non-executive board. He met resistance from powerful directors who represent employees and unions. After the meeting, the non-executive supervisory board also said in a statement the carmaker would cut overhead costs by 5% and procurement costs by 7% over the next two years. Diess had sought to lower costs in Germany to free up resources for a mass electrification push and to transform the 83-year old automaker into a tech company modelled on Tesla (TSLA.O). That led to a clash with Bernd Osterloh, Volkswagen"s chief labour representative, over issues including appointments to the management board and whether to extend Diess"s contract beyond 2023. The non-executive board, of which Osterloh is also a member, said it had unanimously voted to support the transformation to e-mobility and digital technologies. "Over the coming years, the executive board will implement this strategy under Herbert Diess" leadership," the supervisory board said. The statement said Arno Antlitz would become group finance chief, succeeding Frank Witter, who would quit in June 2021 as previously announced. Thomas Schmall would become board member in charge of a newly-created technology division from Jan. 1 Also from next year, Murat Aksel, the head of procurement at the VW car brand will in addition take on the same role for the entire group.Osterloh has been a member since 2005 of the supervisory board at Volkswagen, where under Germany"s system of corporate governance labour representatives make up half the board. He has instead been offered the position of personnel director at Traton (8TRA.DE), Volkswagen"s truck unit that was spun off and separately listed in 2019, one source said. A second source said the group was considering proposing a new labour representative to its board, but did not give a name. Volkswagen (VOWG_p.DE), its main shareholder Porsche SE (PSHG_p.DE) and the works council declined to comment. Five sources told Reuters that Volkswagen would in the near future debate an important change in the composition of its supervisory board, adding no final decisions had been taken. One said announcements on labour representation at Volkswagen were expected on Friday. Another said Traton"s supervisory board would meet on Friday. The move would follow a surge in Volkswagen"s shares, as investors warm to its efforts to overtake Tesla (TSLA.O) and become a world leader in electric cars. The stock has risen by more than half in value so far this year, giving Volkswagen a market value of 132 billion euros ($159 billion). Should Osterloh leave the supervisory board, as would be required should he take up an executive role at Traton, the most likely candidate to replace him would be deputy works council head Daniela Cavallo, the sources said. Any nomination would be subject to a confirmatory vote by shareholders at the annual meeting in July."Volkswagen CEO Herbert Diess" most outspoken opponent is sidelined and it"s fair to say that it creates the opportunity to run VW in a more rational fashion," Bernstein analyst Arndt Ellinghorst wrote in a client note. Reuters first reported on Thursday that Volkswagen was considering a supervisory board change that could lead to Osterloh"s departure"With Bernd Osterloh on the Executive Board team, we will tackle the tasks ahead," Traton Chief Executive Officer Matthias Gründler said in a statement. "His extensive experience in a globally positioned organization will have a positive impact on cooperation among our brands and partnerships." In a statement Volkswagen CEO Diess said Osterloh had "constructively questioned the management and has thus helped time and again to find solutions that were in the company"s best interests." Osterloh will step down from all his roles at Volkswagen and will be replaced by deputy works council head Daniela Cavallo as soon as possible, Volkswagen"s labour representatives said in a statement. She will also take over Osterloh"s functions on Volkswagen"s supervisory board, an appointment that requires shareholder approval. Under Germany"s system of corporate governance labour representatives make up half Volkswagen"s board.