Volkswagen CEO Vows to Strengthen Main Brand's Independence

  • VW marque to have same decision-making role as Audi, Porsche
  • Main shareholders back carmaker amid crisis, Mueller says

Volkswagen AG will strengthen the decision-making power of its main VW brand, Chief Executive Officer Matthias Mueller said, sticking to a decentralization strategy his immediate predecessor was working on before leaving in an emissions-testing scandal last week.

VW “will in future be just as independent from the central corporation as Audi or Porsche,” the luxury divisions that are the carmaker’s biggest earnings contributors, Mueller told executives in a speech Monday.

Volkswagen appointed Mueller, who was running Porsche, as its new head on Friday following a tumultuous week in which the Wolfsburg, Germany-based company, Europe’s biggest car manufacturer, admitted to rigging some diesel engines to cheat on U.S. emissions tests. Mueller had assisted CEO Martin Winterkorn in planning a reorganization to give Volkswagen’s brands and regional units more say in operations, and persuaded the supervisory board to keep the project on its agenda that day, according to a person familiar with Mueller’s thinking.

Winterkorn stepped down on Wednesday following the revelation Sept. 18 that software programmed some of its cars’ diesel engines to meet emissions standards only when undergoing official tests while letting them exceed legal pollutant limits on the road. Volkswagen’s market value has plunged 27 billion euros ($30.3 billion) since the announcement.

U.S. Apologies

The U.S. Federal Bureau of Investigation has opened a criminal probe of Volkswagen, according to a person familiar with the matter, and prosecutors in Germany said Monday that they’re investigating Winterkorn. The head of Volkswagen’s U.S. operations, Michael Horn, reiterated apologies to customers on Monday in a video reminding customers that the vehicles are safe to drive while a fix is being pursued.

The company has said that as many as 11 million vehicles have engines installed that carry the software. Mueller said Monday that the number of cars affected may be lower as the program is only activated in some of them.

With many car components including engines shared across brands, the scandal has touched the mass-market Seat and Skoda divisions in addition to Audi and VW. Audi said Monday that 2.1 million of its cars are equipped with 1.6-liter and 2-liter diesel engines featuring the software, while the Czech nameplate Skoda said 1.2 million of its cars are affected. Spanish small-car unit Seat said it’s still gathering information.

Herbert Diess, who became head of the VW brand in mid-2015, will have four regional chiefs reporting to him, according to the reorganization outlined Friday. The Bentley and Bugatti marques will be grouped with Porsche, while Audi will continue to manage the Lamborghini supercar division and Ducati motorcycles. Winfried Vahland is shifting from running Skoda to overseeing a newly created North American unit.

The company, while “facing the most crucial test in its history,” still has the support of the Porsche and Piech families and German state of Lower Saxony, its main shareholders, Mueller said Monday.

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