Volkswagen says considering board 'changes', may name new CEO

April 10, 2018
Going, going, gone? Matthias Mueller's fate at Volkswagen seems to be hanging in the balance

Scandal-hit car giant Volkswagen said Tuesday it was considering reshuffling its board and that chief executive Matthias Mueller could be replaced, although no decision has yet been made.

"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.

Supervisory board chief Hans Dieter Poetsch had been "speaking with different members of the supervisory and executive boards" about moving or replacing some of them, it went on, adding that Mueller "signalled he was open to play a part in the changes."

Business newspaper Handelsblatt reported that Herbert Diess, head of the VW brand—one of the group's 12 makes of cars, trucks and motorbikes—was slated to take Mueller's place.

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

Mueller, a former of VW subsidiary Porsche, was brought in to replace Martin Winterkorn and is contracted to serve until 2020.

Longtime CEO Winterkorn quit after the firm admitted in 2015 to manipulating 11 million diesel vehicles worldwide to cheat regulatory emissions tests in a scandal that became known as "dieselgate."

Software known as a "defeat device" was used to increase exhaust treatment when cars detected they were undergoing testing, while reducing it under normal on-road driving conditions.

Mueller has chivvied the mammoth carmaker into a massive restructuring, aiming to electrify many of its lines and slim down its operations over the coming decade.

But he himself has landed in prosecutors' sights over suspicions he may have known about the diesel cheating before it became public and failed in his duty to inform investors.

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

"The most important part of getting the crisis under control is over now, so it's right for VW to look in a new direction," judged analyst Juergen Pieper of Metzler bank.

Diess, known as a "very good cost manager" with experience at BMW, would be "the best solution as a successor for the next five years," he added.

Shares in Volkswagen surged in Tuesday afternoon trading, adding as much as five percent on the day before paring their gains to around 4.0 percent at a price of 170.84 euros around 3:30 p.m. (1330 GMT).

Dogged by scandal

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

Meanwhile the cloud of distrust around diesel fuel has hit sales more widely, with their market share in Germany plunging to 32.5 percent in February—19.5 percentage points lower than a year before.

The scandal's tentacles have spread to entangle other carmakers, spurring them into new efforts to burnish their environmental credentials, especially with announcements of slews of new electric models.

Prosecutors have raided Mercedes-Benz maker Daimler looking for evidence of defeat devices.

And BMW admitted earlier this year that some of its models included software that could have fooled regulators' pollution tests—while insisting it was built in by mistake.

All three companies also helped fund a study that tested diesel exhaust gases on monkeys, details of which emerged in January to fresh uproar and resulted in the suspension of VW's chief lobbyist Thomas Steg.

The carmaker-financed research group responsible had also ordered a study testing the effects of diesel exhaust inhalation on humans.

But profits at VW have returned to a similar level as before the scandal broke, reaching 11.4 billion euros ($14.1 billion) last year as consumers appeared to shrug off the controversy.

Explore further: German prosecutors raid VW over carbon dioxide emissions

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