- Executives responsible for car development said to depart
- German magazine reports Skoda chief will head U.S. operations
Matthias Mueller, the head of the Porsche sports-car brand, has emerged as the front-runner to succeed Martin Winterkorn as Volkswagen AG’s chief executive officer and repair the company’s tarnished image as the house cleaning begins, people familiar with the matter said.
Mueller, a company veteran for four decades, enjoys the support of the family that controls VW as well as the automaker’s influential labor leaders, said the people, who asked not to be identified because the discussions are private. The final decision is due to be made on Friday, when the 20-person supervisory board meets at VW headquarters in Wolfsburg, Germany. 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 its market capitalization this week, forcing Winterkorn to step down on Wednesday as the scandal widened and opened the door for sweeping changes at the company, including the departure of other top executives.
Audi development chief Ulrich Hackenberg and Porsche development head Wolfgang Hatz are among those who will leave their posts, two people said. Hackenberg was previously responsible for VW brand development and Hatz ran the nameplate’s motor development.
“The supervisory board has drawn a line and paved the way for a fresh start,” said Arndt Ellinghorst, a London-based analyst with Evercore ISI. Mueller “is a good choice even though he may be seen as a transitionary CEO,” because of his age.
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, on Wednesday placed the blame in VW’s court, issuing a statement saying that “there is no evidence this is an industrywide issue.”
The European Union urged all 28 member countries to start their own investigations, while Japan and India joined South Korea in announcing their own probes into the matter. Germany said it won’t limit its spot checks to VW.
Germany’s motor vehicle administration “will concentrate its investigations not only on the Volkswagen models in question but will also do spot checks of other car manufacturers,” Transport Minister Alexander Dobrindt told reporters in Berlin.
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.
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.
Mueller will likely beat out Herbert Diess, a former BMW AG executive who took over the newly created post of VW brand chief this year, the people said.
In a letter to workers obtained by Bloomberg, Bernd Osterloh, VW’s labor leader, said he would only accept someone for the CEO job who has deep technological and company expertise as well as an understanding of the interests of the employees. Labor representatives hold half the seats on the supervisory board, which oversees strategy and makes top management decisions.
To weather the crisis, Volkswagen needs to discuss ways to give its efficiency program a “turbo” boost in the billions of euros, while not cutting jobs.
“We agreed with the management board that we will now have to pull tightly
together to do the best for our customers, the company and the employees,”
Osterloh said in the letter.