Volkswagen considering replacing CEO Mueller with brand chief Diess amid shake-up
11 April, 2018, 17:05
Scandal-hit vehicle giant Volkswagensaid today it was considering reshuffling its board and that chief executive Matthias Mueller could be replaced, although no decision has yet been made. The 64-year-old Mueller has two years left on his current contract.
Shares in Volkswagen, which also owns the Bentley, Bugatti, Lamborghini, Skoda, Audi and Porsche brands, jumped on the news, and were up 4.3 percent at 171.24 euros at 1520 GMT.
VW has considered listing its trucks business, creating a premium cars division and selling off motorbike brand Ducati, but such reforms attempted by CEO Matthias Mueller have been thwarted by turf wars and opposition from the company's labour leaders. The scandal has cost the company over $30 billion. Amid opposition from labour leaders, Mueller failed to sell motorbike maker Ducati past year. Unions and Lower Saxony together have the power to block his appointment.
Further details are emerging over an expected management shake-up at German auto giant Volkswagen AG, ahead of a supervisory board meeting expected on Friday. Since admitting to the scandal, VW has paid out nearly €25 billion in fines, compensation, recalls and refits.
The company said in its statement on Tuesday that it was considering changes to its complicated management structure.
Volkswagen, which employes over 640,000 people, has turned aggressively to electric cars under Mueller's leadership.
Shares in Volkswagen spiked almost 3% in Frankfurt on Tuesday.
Volkswagen will give labor leaders a management board seat as part of a broad agreement to win approval for Herbert Diess as the German carmaker's new chief executive, sources said on Wednesday.
Chairman Hans Dieter Poetsch is in discussions with "certain members" of the firm's supervisory board and management board.
The VW cars with 2-liter diesels would meet emissions standards tests in a laboratory or testing station, but in normal operation, they emit nitrogen oxides at up to 40 times the standard, according to the EPA. Previous executives including Bernd Pischetsrieder and Wolfgang Bernhard struggled to push through such reforms.
Mueller's likely departure comes two days after Deutsche Bank, another pillar of corporate Germany, dismissed its chief executive, John Cryan, in pursuit of a more rapid turnaround following years of losses.
"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. Its complex structure has extended to its main shareholder, Porsche Automobil Holding SE, where Volkswagen's chairman serves as the CEO and Mueller also serves as a top executive.
Volkswagen declined to comment on whether the board was poised to name Diess as new CEO.
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