Published: Sun, April 15, 2018
Finance | By Jaime Brady

Volkswagen names new CEO in sudden shift

Volkswagen names new CEO in sudden shift

Volkswagen is going to hold a meeting of its supervisory board on Thursday to make decision on a new chief executive, bringing forward the meeting that was earlier planned for Friday, a source with information of the matter said.

The company said Tuesday that it "considers a further development of the management structure of the group" and that "this could include a change in the position of the chairman of the board of management", the German term for CEO.

Volkswagen replaced Müller after he failed to refocus the group's portfolio of auto brands, a key pillar of "Strategy 2025" to transform the company into a leader in cleaner cars after the diesel emissions scandal of 2015.

Mueller, who formerly headed Porsche, took over as CEO unexpectedly in September 2015 when Martin Winterkorn resigned over the company's scandal over cars rigged to cheat on emissions tests.

Having accused Diess of betraying workers and trying to use the emissions scandal as a pretext for pushing through job cuts, the two men struck a far-reaching deal in November 2016 on cost savings and job cuts via natural attrition. The company sold a record 10.74 million vehicles, making it the world's largest carmaker, though the title is disputed by the Renault-Nissan-Mitsubishi alliance, which sold 10.6 million and says Volkswagen is counting trucks that aren't cars. Amid opposition from labour leaders, he failed to sell motorbike maker Ducati a year ago.

"There will be a number of changes on the board of management", the statement said. His contract is due to run until 2020.

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Despite facing billions in fines, vehicle refits and lawsuits relating to its "dieselgate" scandal, Volkswagen's operating results have been robust under Mr Mueller's watch, with sales and profit hitting record highs a year ago.

The Volkswagen empire owns the Ducati motorbike brand, Scania buses and trucks, passenger vehicle brands including Skoda, SEAT and Audi, as well as the Bentley, Porsche and Lamborghini luxury marques.

Yet, he was present in the room on the fateful day when the company's top managers were informed in detail about the depth and breadth of the cheating scandal.

Mueller had "signalled he was open to play a part in the changes" in conversations with supervisory board chief Hans Dieter Poetsch, the company said.

Analysts cheered Mr Diess' appointment. For years, Volkswagen lied through its teeth to regulators and customers both at home and overseas about how clean its diesel cars were.

"Mueller has expressed frustration with the pace of Volkswagen's transformation and more recently about his ability to turn around the brand's image following revelations the company had tested toxic fumes on monkeys".

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