Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automotive News Europe
April 11, 2018 01:00 AM

Mueller's abrupt exit heralds sweeping change to come at VW

Christoph Rauwald
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Bloomberg
    Under CEO Matthias Mueller -- who was talked into taking the top job in the chaotic days following the public disclosure of the diesel cheating -- VW's profit margin climbed to 7.4 percent of sales last year from 6 percent in 2015, when the crisis hit.

    FRANKFURT -- Volkswagen Group's board abruptly ended the tenure of CEO Matthias Mueller, a caretaker who revived the carmaker after its worst crisis on record, turning instead to a leader who can implement deeper changes, people familiar with the matter said.

    Key stakeholders came to the conclusion they couldn't afford to wait two years until Mueller's contract expired to appoint a fresh CEO, as they deliberated an overhaul that will likely include a partial IPO of the heavy trucks division and how best to rapidly implement those changes, said the people, asking not to be identified discussing the private talks.

    The 64-year-old Mueller, 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 quickly settled on Herbert Diess, chief of the namesake brand, as the successor, ruling out other top executives such as the CFO, the heavy-trucks chief and Porsche CEO, the people said.

    None of these behind-the-scenes deliberations were apparent from VW's surprise release that was as short as it was cryptic when it landed on Tuesday afternoon. Mueller had signaled his "general willingness to contribute to the changes,'' the statement read, and that the board was considering changes that included the position of the CEO. It didn't identify Diess as a possible successor, and the company declined to comment further.

    In tapping the 59-year-old Diess for the top job, Volkswagen would elevate a senior executive from its own ranks, while 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 scandal erupted publicly. As the executive overseeing VW's biggest unit, he has routinely butted heads with labor leaders while seeking to cut costs and simplify the automaker's byzantine structure. He was selected in fact for his ability to push through changes at the VW brand that boosted profitability and ultimately saved jobs, the people said.

    VW's statement didn't specify whether the planned changes meant replacing Mueller or simply a shift in responsibilities. It said 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 on Friday to discuss and likely sign off on the management reshuffling and other proposals, the people said.

    Under Mueller -- who was talked into taking the top job in the chaotic days following 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 percent of sales last year from 6 percent in 2015, when the crisis hit. The automaker also managed to fend off Toyota Motor 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 top-down management structure, delegating more responsibility to its brand and regional chiefs. The complexity extends to its main shareholder, Porsche Automobil Holding SE, where Poetsch works 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.

    Including Mueller, VW's management board totals nine people, with responsibilities ranging from purchasing to legal affairs to financing and human resources. Audi, the VW brand, the trucks division, and the group's Chinese operations also have representatives on Volkswagen's top executive body.

    Publicly-listed companies in Germany have two management structures: one consisting of the management board around the CEO and a supervisory board that is made up half-half of labor representatives and members of the capital side to ensure even distribution of interests. Volkswagen is more complex than most of its peers, with the Porsche-Piech families de-facto controlling the manufacturer and the state of Lower-Saxony -- home to the company's headquarters and VW's main factory -- owning 20 percent.

    While 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," likening a discussion about a salary cap for executives to the oppressive system of the former German Democratic Republic. Mueller's total compensation was more than 10 million euros last year.

    Mueller's comments exhibited "a lack of sensitivity at a difficult time for VW," Lower Saxony's economic minister Bernd Althusmann, who also sits on VW's supervisory board, told German daily Hannoversche Allgemeine Zeitung. Lower Saxony played a key role in pushing for Mueller's replacement, arguing that his public comments were not helping the automaker win friends, the people said.

    Among other proposed changes, VW is also looking at replacing personnel director Karlheinz Blessing with Gunnar Kilian, a labor representative who is close to works council chief Bernd Osterloh, the people said.

    RECOMMENDED FOR YOU
    2022 Eurostar winner Enrico Salvatori of Qualcomm
    Related Articles
    VW's Diess goes from lame duck to top dog
    VW's warring stakeholders to hash out a new strategy
    VW Group appoints Herbert Diess CEO, creates new divisions
    VW's new boss mulls asset sales, aims to streamline
    Recommended for You
    Enrico Salvatori
    2022 Eurostar winner Enrico Salvatori of Qualcomm
    Christian Dahlheim
    2022 Eurostar winner Christian Dahlheim of VW Financial Services
    Milan Nedeljkovic
    2022 Eurostar winner Milan Nedeljkovic of BMW
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us