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VW appoints Matthias Müller as Chief Executive

Matthias Müller is the new Chairman of the Board of Management of the Volkswagen Group; VW initiates major restructure

Matthias Müller is the new Chairman of the Board of Management of the Volkswagen Group.

VW’s supervisory board elected the Porsche Chairman and VW board member at its meeting on 25 September.

Müller has long been tipped for the role – referred to more commonly as Chief Executive – and was reportedly Ferdinand Piech’s choice for Chief Executive during the April 2015 boardroom clash when the former VW Group Chairman tried to oust Martin Winterkorn as Chief Executive.

VW opts for an insider

An engineer and VW Group insider, Müller has an impressive track record at Porsche, which he has led since October 2010. His formal titles at Porsche were: Member of the Board of Management of Volkswagen AG, President of the Executive Board of Porsche AG and Member of the Executive Board of Porsche Automobil Holding SE.

Müller remains a member of the board of Volkswagen AG – his current contract is valid until the end of February 2020. Officially, Müller will continue in his capacity as Chief Executive at Porsche until a successor has been appointed. According to dpa, Müller’s successor will be Porsche’s head of manufacturing, Oliver Blume. The appointment will be made by Porsche’s supervisory board, which is expected to meet in the final days of September or early October.

Müller’s career within the Volkswagen group began with an apprenticeship at Audi after completing high school, and he has worked at various divisions of the Group ever since.

Müller’s appointment brings some calm to the crisis engulfing Volkswagen, a week after the US Environmental Protection Agency (EPA) issued the VW Group with Notice of Violation (NOV) for the use of a ‘defeat device’ to produce favourable emissions results under test conditions.

Key executive changes

A major reorganisation is taking place at Volkswagen. Some of the other key executive changes include:

  • Dr. Winfried Vahland, formerly Chairman of the Board of Directors at Škoda, becomes a member of the Volkswagen brand Board of Management and assumes responsibility for new North America region;
  • Bernhard Maier, formerly Board Member for Sales and Marketing of Porsche AG, replaces Vahland as Chairman of the Board of Directors at Škoda;
  • Michael Horn remains President and Chief Executive of Volkswagen Group of America, reporting under the new structure to Vahland;
  • Christian Klingler, member of the Board of Management of Volkswagen AG with responsibility for Sales and Marketing and member of the Volkswagen brand Board of Management with responsibility for Sales, Marketing and Aftersales of the VW passenger cars brand, leaves the company with immediate effect. VW’s press release explains that this is “part of long-term planned structural changes and as a result of differences with regard to business strategy. This is not related to recent events”;
  • Matthias Müller “will head the Sales department at Group level in an interim capacity until further notice”;
  • Jürgen Stackmann, previously Chairman of SEAT, assumes Klingler’s function as a member of the Volkswagen brand board of management, reporting directly to Dr. Herbert Diess, Chairman of the Executive Committee of Volkswagen brand;
  • Luca de Meo moves from his role as Audi AG Board of Management member for Sales and Marketing to become Chairman of SEAT;
  • Francisco Javier Garcia Sanz, Member of the Board of Management of Volkswagen AG with responsibility for Procurement, has his contract extended by five years;
  • VW Supervisory Board’s nomination of Hans Dieter Pötsch as Chairman upheld, with the vote to take place on 9 November 2015; until that time, he remains the company’s Chief Financial Officer.

Changes to divisional structure – ‘North America region’ and Porsche brand group established

Other changes include:

  • Markets in Canada, Mexico and USA combined into new North America region, led by Vahland;
  • Modular toolkit department to be established, overseen by Müller;
  • Porsche brand group established consisting of Porsche, Bentley and Bugatti;
  • No changes to the Audi brand group (Audi, Lamborghini and Ducati) and Truck & Bus Holding;
  • Volkswagen, SEAT and Škoda each to have a member of the Group Board of Management

Somebody’s going to get fired

In the days leading up to the board meeting, there was considerable media speculation about who would take the fall for the diesel scandal. At the time of writing, the decisions have sll focused on new appointments within thd new corporate structure.

We can reasonably expect to learn of the fate of several key executives in the coming days and weeks.

In a statement, the Supervisory Board confirmed that a process to suspend employees over the use of a ‘defeat device’ was already under way, using information currently available.

A separate statement by Dr Herbert Diess, Chief Executive of the Volkswagen Passenger Cars brand, confirmed that 5 million of the affected vehicles worldwide were Volkswagen brand cars: “Certain models and model years of these vehicles (such as the sixth generation Volkswagen Golf, the seventh generation Volkswagen Passat and the first generation Volkswagen Tiguan) are equipped exclusively with type EA 189 diesel engines. As previously announced, all new Volkswagen Passenger Car brand vehicles that fulfill the EU6 norm valid throughout Europe are not affected. This therefore also includes the current Golf, Passat and Touran models.”

Martin Kahl

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