Volkswagen replaces Herbert Diess as CEO of the VW brand

Squabbling at the top table of Volkswagen has resulted in a management reshuffle.

Herbert Diess was replaced as chief executive of the VW brand on Monday (June 8).

Chief operating officer Ralf Brandstaetter is to take on the role.

The reshuffle comes after weeks of spats between VW's powerful labour leaders and managers over the pace and scale of cost-cutting plans.

The brand wants to free up resources for a radical shift toward electric cars.

VW said Brandstaetter will take over on July 1st.

But Diess is far from down and out.

He remains group chief executive, governing brands such as Audi, Bentley, Skoda and Porsche.

Volkswagen said Diess will also retain overall responsibility for Volkswagen passenger cars.

He's been battling to get the company's powerful labour leaders, who control nine of the 19 seats on the supervisory board, to agree to painful costs cuts.

The savings are designed to help pay for a 34 billion euro - or $38 billion - investment in electric and autonomous cars.

Diess was also under pressure after VW was forced to halt sales of its newest Golf model because of software glitches.