VW ousts CEO who saved it after scandal
Matthias Mueller led the carmaker after diesel testing fiasco.
Volkswagen’s board abruptly ended the tenure of Chief Executive Matthias Mueller — a caretaker who revived the company after its near-death experience of cheating on diesel-emissions testing — and turned instead to a leader who can implement deeper changes, people familiar with the matter said.
Key stakeholders concluded they couldn’t afford to wait two years for Mueller’s contract to expire before they appoint a fresh CEO, as they deliberated an overhaul that will probably include an IPO of the automaker’s heavy trucks division and how to most rapidly implement those changes, said the people, who asked not to be identified discussing the private talks.
The 64-year-old Mueller, always a reluctant CEO who had grown weary of the regular grillings by board members, responded during the talks by signaling he was prepared to step aside, they said. With Mueller agreeing to go, the controlling Porsche-Piech clan, the state of Lower Saxony and powerful labor leaders settled on Herbert Diess — the chief of Volkswagen’s namesake brand — as the successor, the people said.
None of these behindthe-scenes deliberations were apparent from the short, cryptic statement VW issued Tuesday. It said that the board was considering changes that included the position of the CEO, and that Mueller had signaled his “general willingness to contribute to the changes.” It didn’t identify Diess as a possible successor, and the company declined to comment further.
In choosing the 59-yearold Diess for the top job, Volkswagen is elevating a senior executive from its own ranks and handing the reins to someone who was not at the automaker when the diesel cheating began. Diess joined VW from German rival BMW in mid-2015, shortly before the cheating scandal erupted publicly. As the executive overseeing VW’s biggest unit, he has routinely butted heads with powerful labor leaders while seeking to cut costs and simplify the carmaker’s byzantine structure.
VW’s statement didn’t specify whether the planned changes meant replacing Mueller or simply a shift in responsibilities. It said that Chairman Hans Dieter Poetsch will spearhead the transition, and that there is no certainty that personnel changes will in fact occur.
The supervisory board will meet Friday to sign off on the management changes and other proposals, the people said.
Under Mueller — who was promoted to the top job in the chaotic days after the public disclosure of the diesel cheating — VW has weathered the blows from the scandal while embarking on an aggressive expansion into electric cars. Its profit margin climbed to 7.4% of sales last year from 6% in 2015, when the crisis hit. The carmaker also managed to fend off Toyota Motor Corp. to retain its status as the world’s largest automaker.
In the aftermath of the diesel-cheating scandal, Mueller sought to overhaul Volkswagen’s rigid topdown management structure, delegating more responsibility to its brand and regional chiefs. The complexity extends to its main shareholder, Porsche Automobil Holding, where Poetsch serves as the CEO and Mueller as a top executive. Porsche said in a separate release that any changes at VW would be reflected in its management.
Though Mueller is a lifelong VW veteran, at times he cut an uneasy figure in the top job, which required him to manage the often contradictory demands of angry car owners, disgruntled investors, well-organized workers and state officials with their own political agendas.
Tensions flared in recent weeks between Mueller and Lower Saxony’s leadership, which is represented on the supervisory board. Mueller told German magazine Der Spiegel in March that he “doesn’t like politicians meddling with my business.”
Mueller’s comments exhibited “a lack of sensitivity at a difficult time for VW,” one Lower Saxony official said.
Volkswagen’s U.S.traded common shares rose 4.1% to $41.89 on Tuesday.