Current Porsche boss has been announced as the successor to Martin Winterkorn, with major changes to the company's board of management
25 September 2015

Porsche boss Matthias Müller has been announced as the new CEO of the VW Group, replacing Martin Winterkorn, who resigned from the top position at the scandal-hit firm on Wednesday.

Müller, who had emerged as the frontrunner for the top job at VW earlier this week, is said to have signed a contract that lasts through to 2020. Several other major changes were also announced, as the VW Group heavily revised its management structure to focus on more responsibility and governance at regional level.

“Mr Müller is happy to take this on at difficult times for the company. Müller knows the VW Group and will immediately set upon his new tasks with his whole strength. We particularly appreciate his critical view of things," said Berthold Huber, deputy chairman of the supervisory board for the VW Group.

“The emissions test stories are a moral and political disaster for VW. Illegal behaviour of development engineers in development of engines has shocked the public. I would like to apologise in every form in front of the public, the authorities and our investors,” he added.

Huber confirmed that figures at the VW Group would be suspended - but stopped short of announcing the much-expected departures of several key figures in the engineering division. “The board of management, according to latest findings, has recommended to immediately suspend some employees until final investigations have been made," he said. "An American legal company has been put in charge of further investigations and they are also to prepare.”

New VW boss Matthias Müller said: "My most urgent task is to win back trust for the Volkswagen Group – by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation. Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry. If we manage to achieve that then the Volkswagen Group with its innovative strength, its strong brands and above all its competent and highly motivated team has the opportunity to emerge from this crisis stronger than before."

He went on to say that he was only recently asked to take on the role, saying: “The supervisory board asked me today to take on the position of chairman of the board of VW. I am grateful for this confidence. I take on this role in times where our company faces challenges it has never had to face before, but I take on this challenge with confidence. I will do everything it takes to win back confidence of our employees, investors, staff and the public. Our patience will be tested as much as yours but speed is less essential than being thorough." 

He added, "At no point was the safety of our vehicles or our customers in danger. That is important to me.”

Stephan Weil, a member of VW's supervisory board, paid tribute to outgoing boss, Martin Winterkorn, saying: “The farewell of Martin Winterkorn is a very special moment. A lot is owed to Professor Winterkorn.”

The supervisory board also approved a new management structure for the group and the brands as well as for the North America region.

Berthold Huber said: “The new structure strengthens the brands and regions, gives the group board of management the necessary leeway for strategy and steering within the company, and lays a focus on the targeted development of future-oriented fields.”

Winfried Vahland, formerly chairman of the board of directors at Skoda, has now taken over as boss of a reorganised North American region, which now includes USA, Mexico and Canada combined. His successor at Skoda will be Bernhard Maier, who was until now sales and marketing of Porsche.

Significantly, Michael Horn, the under-fire president and CEO of Volkswagen Group USA, has retained his job despite earlier rumours that he would be axed. It is understood that US dealer groups lobbied for him to stay in his role.

Jürgen Stackmann has been shifted from his job as chairman of Seat to take over Christian Klingler’s role as sales and marketing boss at Volkswagen.

Klingler is leaving the company with immediate effect, with the reason for his departure given as “part of long-term planned structural changes and as a result of differences with regard to business strategy”. But Volkswagen stressed that his departure from the company was “not related to recent events”. Matthias Müller will lead the sales department at group level in the interim.

The new Seat chairman is Luca de Meo, currently sales and marketing chief at Audi.

The board has decided to abolish the production department at Volkswagen Group management level, giving more responsibility to the individual car brands and also to geographic regions.

Huber said: “Going forward, the brands and regions will have greater independence with regard to production. So it follows that they should also hold the responsibility for these activities.”

The group is also going to “scale back [its] complexity”, said Huber.

Existing corporate bodies, structures and processes will be streamlined at group level, in particular by strengthening the brands and regional accountability. To that end the Volkswagen brand will introduce a management structure with four regions, each led by a local CEO with a direct reporting line to the brand chairman, Herbert Diess.

VW’s group reorganisation includes the creation of a Porsche brand group, including both the Bugatti and Bentley marques, which will utilise use of what bosses term “the sports car and mid-engined toolkit.

No director has yet been announced as head of the new division, but insiders believe Wolfgang Dürheimer, who had a long career at Porsche and currently leads both Bentley and Bugatti, is the strongest contender.

This Audi brand group, incorporating Lamborghini and Ducati, will continue, but the whole “toolkit” strategy will come under closer guidance from the group CEO. The volume brands — Volkswagen, Seat and Skoda — which utilise the “transverse toolkit” will each be represented by separate members on the board of management.

Read more on the Volkswagen emissions scandal:

How the Volkswagen story unfolded

Reports suggest VW was warned of illegal software 'years ago'

How VW's 'defeat device' works

Top VW bosses to leave

Prosecutors to investigate Martin Winterkorn

PSA Peugeot Citroën leads calls for tougher emissions test procedures

Your key questions answered

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Blog - it's time for firm action in the wake of the VW emissions scandal

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Comments
8

24 September 2015
The guy from the BMW would probably be a good strategic choice to calm down investors and also to deflect the negative attention that the group has come under. Not my place it's up to the Porsche-led board but if I were them I would seriously consider Diess even if for time being as a caretaker. His association with BMW goes in his favour. After all BMW has emerged as the German hero in this whole saga.

24 September 2015
fadyady wrote:

Not my place it's up to the Porsche-led board

fadyady wrote:

if I were them

That's twice you have reminded yourself that you don't actually run Volkswagen AG. Something which is fairly obvious to all and sundry, even without your ocean-going bitterness towards the company. But why be so horrid about them? I mean, they always speak very highly of you...

25 September 2015
Send for the army.

24 September 2015
How about this: Germany's newly-arrived army of Syrian migrants are all looking for something to do. So get the migrants out there, fixing all the wonky VWs. Set up a drive-thru at each migrant camp and that should do the trick; your countrymen are usually rather adept at organising labour camps.

25 September 2015
"He added, 'at no point was the safety of our vehicles or our customers in danger. That is important to me.'" No one thought they were in danger Matthias, but I can guess why you mentioned it: this obvious allusion to the Toyota scandal is a thinly-veiled request for a damage-limiting perspective to be kept by both the authorities and the public when considering their response. Clever ... you sow the seed and let it germinate.
VW will rightly get hammered but will undoubtedly survive, and I hope the inevitable job losses, across all countries, are minimal. After all, they haven't killed .... There you go - Matthias has already done a number on me.

Wide cars in a world of narrow.

25 September 2015
Herald wrote:

this obvious allusion to the Toyota scandal is a thinly-veiled request for a damage-limiting perspective to be kept

Quite. The difference here would be "intent": the case against Toyota was largely based on negligence; the actions of Volkswagen were highly premeditated. Which is probably why this story has legs, despite not one single fatality. Legislators will probably have a field day prosecuting VW but individual consumers could find it much tougher; nobody buys a car for its NOx performance and most people had never heard of it until this week. Suing VW on the basis of excessive NOx emissions would require the consumer to prove beyond doubt that this caused them harm or financial loss. Or rather, prove that this caused them measurably *more* harm or loss than ordinary amounts of NOx would do. A bit like claiming that drinking Bleach "A" made you feel far worse than drinking Bleach "B".

26 September 2015
Norma Smellons wrote:

Suing VW on the basis of excessive NOx emissions would require the consumer to prove beyond doubt that this caused them harm or financial loss.

I believe the level of proof required for civil actions is "balance of probabilities", so in theory 51% in consumer favour would be enough, although I doubt a case would be "run" for anything less than 60% in consumer favour. I will be interested to see what the lawyers come up with, though. And as far as financial loss (specifically loss of value) is concerned, has there been an intervening cause (e.g. media attention)? If VW correct the problem free of charge, address the cost of any short term inconvenience, and compensate for any additional running cost if any after the fix, then that may be all they have to do to bring down a litigation risk. They may be able to defend an action for "loss of value", although commercial considerations would come into play I am sure. But these things can take a long time, not least because finding a long enough Court slot can be a challenge.

26 September 2015
Herbie can't go to Monte Carlo, he has failed his emissions tests.

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