Volkswagen Names New CEO
Volkswagen has hired former Porsche CEO Matthias Mueller as its new CEO, the company announced Friday. Mueller’s appointment comes just two days after former Volkswagen CEO Martin Winterkorn resigned following a scandal involving the company’s use of software designed to fool regulators into believing that diesel cars were following auto emissions laws when in reality they were not.
According to The USA Today, the company has admitted to rigging 11 million cars with the software, which hid the fact that the vehicles were emitting harmful pollutants at rates of up to 40 times U.S. standards. Volkswagen is now facing a slew of government investigations as well as consumer lawsuits over the recent scandal.
Winterkorn maintained that he was “shocked by the events of the last few days,” alluding to the discovery by the U.S. Environmental Protection Agency that Volkswagen had used software to cheat on emissions testing in its so-called “clean diesel” vehicles,” according to wired.com.
“Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group,” Winterkorn wrote. “As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group.” Until his termination, Winterkorn was the highest paid executive in Germany, with an annual salary of approximately $18 million dollars.
Mueller will face some big challenges when he steps into his new role as CEO of the embattled company. Despite the ongoing corruption scandal, he promises to turn the company around and that it will eventually emerge from it’s current crisis.
“My most urgent task is to win back trust for the Volkswagen group by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation,” Mueller, 62, said in a news release. “Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry.”
He then added: “If we manage to achieve that, then the Volkswagen group with its innovative strength, its strong brands and above all its competent and highly motivated team has the opportunity to emerge from this crisis stronger than before.”
According to cnbc.com, the 62-year-old has been in the Volkswagen fold for years, working under the Audi brand from 1977 after studying information technology and toolmaking in his native Germany. When he was at Audi, Mueller headed system analysis, product management and eventually the Lamborghini product line, before departing to Volkswagen’s Wolfsburg headquarters where he would lead the company’s projects department.
“At Volkswagen subsidiary Porsche, which he has led since 2010, Mueller is credited with helping deliver record revenue and profit, with deliveries jumping 17 percent in 2014 from a year earlier,” states cnbc.com.
Even though he was successful in his most recent job role, Mueller’s first task is to convince both investors and the public that a longtime experienced insider can fix a broken corporate culture. Subsequently, David Bach, who is the senior associate dean at the Yale School of Management said that the company’s recent misconduct is “so brazen” that a publicity campaign is simply not enough.
“The very fact that he has spent a good part of his career a Volkswagen raises question about this promotion,” Bach said. “Very often this requires someone from the inside to clean these things up.”
On Friday, the company’s board also announced a restructuring plan. According to Nasdaq, the markets in the USA, Mexico, and Canada will be combined and strengthened to form a new North America region. Effective November 1, the group’s activities in the region will be led by Winfried Vahland, formerly chairman of Skoda.
“Vahland’s successor as chairman of Skoda will be Bernhard Maier, until now board member for sales and marketing of Porsche, reports Nasdaq. In the meantime, Michael Horn will continue to remain CEO of Volkswagen of America.
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