Volkswagen steers chief to exit lane

Randal Sanchez
April 11, 2018

Last month, Mueller said that chief executives of big companies deserved high pay because "one always has one foot in jail".

"It is now open whether the considerations and discussions will lead to a further development of the management structure or to personnel changes in the Board of Management", it said. This could include "personnel changes in the board of management" and different responsibilities for its members, the Wolfsburg-based business said.

Both Bloomberg and "Handelsblatt" are reporting that current VW brand chief Herbert Diess is to replace Mueller.

In tapping the 59-year-old Diess for the top job, Volkswagen would elevate a senior executive from its own ranks, while handing the reins to someone who was not at the automaker when the diesel cheating began.

Markets reacted positively as both Porsche's and Volkswagen's shares rose by more than 4 percent shortly after the first reports of the looming management reshuffle.

Europe's largest automotive group is poised to replace group chief executive Matthias Mueller this week with Diess, a cost-cutter hired in 2015 from BMW as it seeks fresh impetus for its recovery from an emissions scandal.

The supervisory board will reportedly vote on the change in top leadership at a meeting on Friday.

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As CEO, Mueller led Volkswagen through the aftermath of the scandal, which included billions in fines and penalties and USA criminal charges against several executives, to record sales and strong profits.

"If Diess is confirmed as the successor, VW shares will extend their gains", Evercore ISI analyst Arndt Ellinghorst said, who has an "outperform" rating on the stock. No further information was made available with regards to the precise fate of acting CEO Matthias Mueller.

But the persistent tug of war between its controlling families, unions and other stakeholders have made it hard to drive through structural changes that investors have said are key to the company fulfilling its potential.

"A change to the chief executive could be involved", it added.

A Volkswagen spokesman declined to comment on the rumours when contacted by AFP.

While Mueller is a lifelong VW veteran, at times he cut an uneasy figure as CEO, which required him to manage the often contradictory demands of angry vehicle owners, disgruntled investors, well organized workers, and state officials with their own political agendas.

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