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VW Set to Appoint Mueller as CEO

VW

Volkswagen AG is set to appoint Porsche brand chief Matthias Mueller as its new CEO and announce the departure of top executives in a sweeping overhaul to begin repairing the company’s image tarnished by rigged emissions tests.

The 20-person supervisory board meets Friday to vote on naming Mueller, a company veteran for four decades who enjoys the support of the family that controls VW as well as the automaker’s influential labor leaders, said people familiar with matter, who asked not to be identified because the discussions are private. A Volkswagen spokesman declined to comment.

The 62-year-old Porsche chief would take charge as Volkswagen seeks to regain the trust of consumers and regulators after admitting to rigging engines to circumvent pollution controls. The crisis wiped about 20 billion euros ($22.4 billion) off VW’s market value this week, forcing Chief Executive Officer Martin Winterkorn to step down on Wednesday as the scandal widened and opened the door for the exit of other top executives.

Audi development chief Ulrich Hackenberg and Porsche development head Wolfgang Hatz are among those who will leave, two people said. Hackenberg, a Winterkorn confidante, was previously responsible for VW brand development and Hatz ran the nameplate’s motor development.

The entire auto industry and the methods used for testing vehicles are coming under scrutiny following revelations that VW’s “clean diesel” cars have software intended to defeat emissions tests. The European automakers’ lobby group, the ACEA, placed the blame in VW’s court on Wednesday, issuing a statement saying that “there is no evidence this is an industrywide issue.”

The European Union urged all 28 members Thursday to start their own investigations, with Germany, Italy, France and the U.K. among countries in the region to already do so. Japan, India and South Korea have also announced probes into the matter. VW has also asked local prosecutors in Germany to start a criminal probe.

Standard & Poor’s said Thursday that it was considering lowering VW’s long-term rating “by one or more notches” and Moody’s changed its outlook on the automaker to negative. Competing ratings service Fitch said Wednesday it was weighing a cut. VW shares closed little changed in Frankfurt trading after losing 35 percent of their value Monday and Tuesday.

Executive Changes

As part of the reorganization, Winfried Vahland will likely take over for the VW brand’s U.S. chief, Michael Horn, Auto Bild magazine reported, citing unidentified people at the German carmaker. Vahland currently runs the Skoda division and prior to that was responsible for the automaker’s operations in China.

Mueller was already touted as a potential CEO successor when former Chairman Ferdinand Piech failed in a bid to oust Winterkorn in April. He’s run the maker of the 911 sports car since October 2010. Over the past four years, the unit’s earnings have surged by almost two-thirds. Like his predecessor, Mueller is a long-serving Volkswagen employee, joining the Audi division as a toolmaking apprentice in the early 1970s.

Source: Bloomberg