VW CEO Mueller's likely exit heralds sweeping changes at carmaker

Sean Reid
April 13, 2018

The 59-year-old Diess looks set to retain his responsibilities as head of the core VW passenger vehicle brand if he becomes the group's next CEO, the second source said.

Volkswagen announced the CEO change on Tuesday in a short and cryptic statement, abruptly ending the reign of Mueller who took over at VW a week after it was plunged into its biggest-ever corporate scandal.

As well as Volkswagen, the German company also owns several other brands including Audi and Porsche.

64-year-old Mr Mueller, always a reluctant CEO who had grown tired of the regular grillings by board members, responded during the talks by signalling he was prepared to step aside, they said. Amid opposition from labour leaders, he failed to sell motorbike maker Ducati past year.

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.

Mr Mueller had been running Porsche before being elevated to replace Martin Winterkorn. "Unions and Lower Saxony together have the power to block his appointment".

Volkswagen will also reorganize their 12 brands into four to six new vehicle divisions.

Volkswagen has picked a new leader in a management shakeup to ready the world's largest automaker for a wave of technological change upending the industry's traditional business models.

Today's announcement comes after VW directors said it could replace the group's CEO as part of a wider shake-up in management and strategy. His contract is due to run until 2020.

"There have been historic episodes where cost cutters have been brought in to sort out the namesake VW brand, but who then leave or are squeezed out before their work is really done", Sanford Bernstein analyst Max Warburton wrote in a note.

"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".

"The Volkswagen group is considering further evolving the leadership structure, which could be connected with changes in the board. a change to the chief executive could be involved", VW said in a statement. He and Mr Mueller instead agreed to guarantee VW's German jobs until 2025, to get labour approval for a plan to turn the company into a mass producer of electric cars.

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