Volkswagen Names New CEO

Andrew Cummings
April 14, 2018

Volkswagen replaced CEO Matthias Mueller with Herbert Diess on Thursday and said it is creating a new management structure.

The volume business will include the VW brand, Seat and Skoda, as well as light commercial vehicles.

Diess, a former BMW AG executive, has had the hard task of negotiating restructuring and cost-cutting with German worker representatives since becoming head of the Volkswagen brand in 2015.

Oliver Blume, chairman of Porsche's board of management.

The new structure will include three brand groups: volume products, premium and super premium.

More insights about the rebuilding are required to be uncovered at a question and answer session at VW's Wolfsburg base camp on Friday morning.

He led the Wolfsburg-based company through the aftermath of the scandal and turned in record sales and strong profits a year ago.

Muller, formerly the CEO of Porsche, took the helm of the group in the aftermath of the diesel scandal in 2015, in which the company had been found to be installing "defeat devices" in their cars to cheat emissions tests. The board of directors turned to longtime company employee Mueller, who started at Audi in 1978.

Mueller, 64, has steered the mammoth carmaker into a massive restructuring, aiming to offer electric versions of many of its models and slim down its operations over the coming decade.

"It's right for VW to look in a new direction", judged analyst Juergen Pieper of Metzler bank.

Shares in Volkswagen rose 0.6 percent to 177.64 euros by 1250 GMT, against a similar rise for the STOXX 600 automotive index.

Dieselgate has so far cost VW more than 25 billion euros ($31 billion) in buybacks, fines and compensation, and the carmaker remains mired in legal woes at home and overseas.

Volkswagen has supplanted its CEO with Herbert Diess, who assumes on liability for the whole organization in the wake of managing the VW mark.

The move is part of sweeping changes announced by the German company, which also owns several other brands including Audi and Porsche. Diess will be responsible for Group development and research and will also take on additional Group management roles alongside heading the Vehicle IT.

Diess appeared to be on his way out at VW after a public clash with Osterloh who then accused him publicly of breaking promises and unduly pushing cost cuts.

One of Diess's biggest challenges as he takes the helm at VW will be to clarify the group's vision for the future as the auto giant navigates between a pivot towards electric vehicles and clinging to the diesel technology it has invested so heavily in over the years.

Even with the diesel emission burden to bear and faced with various accusations in the matter from all sides, Müller successfully managed to lead the VW boat through rough waters.

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